For most, the actual process of buying a home as a retiree is not much different than buying a home at another stage of life. But when it comes to making decisions around location, type of home and even the size of the home, it is important to make sure those choices align with the kind of retired lifestyle you want to live.
Key Takeaways
• Most retirees are on a fixed income, so make sure you are comfortable with the mortgage payments of your home as you live there 5, 10, 15 years or more into retirement.
• As a retiree, the consideration of whether to rent or own your home is an important one. Many retirees choose to own their home, with the goal of passing along to loved ones down the road.
• When planning for the cost of home ownership in retirement, it’s important to remember the costs associated with the home outside of just the mortgage payment. This could include things like property taxes, HOA fees and costs for maintenance and upkeep of the home.
• The right financial planning will allow you to purchase a home that you can enjoy long into retirement, without the strain of payments you cannot afford. Remember to consider the cost of the lifestyle you want to enjoy when looking at your overall financial picture, and how the cost of your home will factor into that plan.
Videos are for informational purposes only and represent the opinions of the speakers. Chase does not warrant the completeness, timeliness or accuracy of the content.
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VIDEO TRANSCRIPT
Michael: As a retiree, buying a home isn’t any more complicated than somebody who is a salaried employee. And the bigger conversation to have is now that we do have a fixed income… what are we comfortable with in terms of your payment. Do you want to stay in this house ya know 10 to 15 years, do you think this is a house you might give to a family member down the line, so we really want to equip you with the right mortgage.
Chuck / Henrietta: As a retiree, you are most likely on a fixed income, so you wanna be able to project or think ahead of time, 5 10, 15 years, to be able to maintain this home, which could be the mortgage the taxes the upkeep.
Michael: Purchasing a home as a reitree will not impact the benefits you receive, through social security, through your pension, through any kind of retirement award. We will have an underwriter validate your income, we usually go to 43% of your pre tax income in terms of the amount of debt that will allowable, and that includes principle, interest, taxes, and insurance on the new home, along with any liabilities on the credit report. As a retiree, the consideration, rent versus owning, there are a lot of things to consider.
Chuck / Henrietta: It was actually a really nice place we rented, but in the end you are really still just a tenant. And while the land lords are nice, you don’t have very much freedom in renting.
Sarah: Having a home, you’re gonna have more space, but the expenditures of the upkeep of the home, that’s something that’s unpredictable. So you need to be able to have savings set aside to cover those costs.
Michael: In addition to their mortgage they’ll be looking at HOA fees. Which could be a few hundred dollars a month, depending on the community.
Chuck / Henrietta: As soon as we were able to, we went looking for a house. And decided at that point when we bought our home that we wanted a house that we could keep forever. That’s what home ownership is all about, just having that right place that you really wanna spend time in. And what that really boils down to is having a plan so I can afford a home, I can afford to make payments. That’s what financial planning will do for you. It fulfills your dreams.