If you have plans to retire in the next 10 years you might want to consider purchasing a second home now. There are financial benefits to buying your retirement home while you’re still working full time:
-Your debt-income ratio will be lower when you’re employed, making it easier to get approved for a mortgage.
-Having a steady income will be beneficial if you need to make repairs or update your home.
-While still working, you can afford additional payments and can pay off some of the mortgage before you move in so you will ideally have a debt free retirement.
-Knowing ahead of time your budget for housing, you can better plan what your living expenses will be during retirement.
-If you can carry two mortgages at once, you can rent out your retirement house for those 10 years before you’re ready to move in. There are also potential tax benefits of making it a rental property.
Some things to take into consideration when choosing your retirement home are:
-Make a list with your spouse of your likes and needs both present and future, and pick the most important things on that list.
-The home should be “age friendly”, preferably a one-level or with a bedroom on the main floor, with wide doorways and unobstructed entryways, open floor plans, walk-in shower, etc.
-Look for a home with nearby medical services and local activities to keep you healthy and active. Consider if being close to family and friends is important to you. Don’t assume you’ll be able to drive forever.
-Make sure you’ll be able to afford the place, including taxes, homeowners’ association fees, repairs, and things like lawn care and general maintenance.
-Insure properly and make a financial plan for the “unknowns”.
Talk to your realtor, mortgage lender or financial advisor to see when is the right time for you to buy your retirement home, depending on your local real estate market.
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