Buying a new home at any age is a big decision. Even if you’ve done it before, it might have been a long time since you thought about all that goes into it. This can ring especially true for seniors.
Beyond the obvious things to watch for, like price, upkeep, and accessibility, there are other pitfalls that seniors need to avoid when purchasing a new home – some that might be tricky to spot when you’re caught up in the excitement of a move.
Here are some major pitfalls you need to avoid.
There’s no greater pitfall in buying a home later in life than improperly financing the whole venture. Seniors on fixed incomes that attach themselves to new, monthly mortgage payments may find themselves struggling to make ends meet. Some seniors can fall into the trap of devoting too much of their savings into down payments and eventual repair costs. Some may seek the help of family, only to find that they’ve caused a regrettable burden on their loved ones.
To that latter point, you may find that you can only qualify for a new mortgage if you get a cosigner – most likely one of your children. Of course, this can seem preferable to asking your children to help with money up front, but can have its own hidden pitfalls.
First, your kids may be on the hook for any missed mortgage payments, which could seriously damage their credit.
“If you decide to put the title in your … name and [you] ever need to apply for Medicaid to pay for assisted living or a nursing home, the home could be considered a countable asset and may need to be sold before Medicaid pays for any health care expenses,” says Realtor.com.
Co-signing can work, it’s just something you need to consider fully before making the big decision.
So much effort can be put into getting the proper financing and figuring out the other tangibles of buying a new home that some of the intangibles – the “sleeper costs” – can be forgotten.
“The difference between renting and homeownership is the sleeper costs. Most people just focus on their mortgage payment, but they also need to be aware of the other expenses such as property taxes, utilities and homeowner-association dues. New homeowners also need to be prepared to pay for repairs, maintenance and potential property-tax increases. Make sure you budget for sleeper costs so you’ll be covered and won’t risk losing your house,” says HGTV.
And don’t forget the costs you’ll incur immediately upfront. For example, you’ll want to hire quality moving help so that you can ensure your belongings get from your old home to your new home safely and soundly. Make sure to shop around and compare costs.
You might also find that your new home needs modifications in order for it to be completely accessible for you or your spouse, or if you plan on passing the home on to a loved one, perhaps it needs work done now to work for them in the future. You can only really afford a new home if you can have enough savings to cover unexpected repairs and fees. So, be sure to factor in all of these costs when you’re choosing your new home.
As you age, the amount of “stuff” you accumulate increases, but your ability to manage all that stuff may decline. If you’re moving to a new house, you should probably take the time to declutter and downsize your material life.
For one, it’ll make the move itself easier. As a senior, you really don’t want to be dealing with an excess amount of boxes, furniture, appliances, etc. There’s a solid chance that the house you’ll be moving into is a bit smaller than the one you own now, as many seniors who buy new houses are choosing to leave the house they raised families in, instead opting for homes that are better suited for one or two people. If you have a problem with visual impairment or mobility, this is especially important. You don’t have to yard sale your entire life, but a completely lateral move with no downsizing is likely not your best option.
Of course, there are many others.
There are plenty of potential stressors involved with buying a new home. Make sure to avoid the above pitfalls to make the transition as smooth and seamless as possible.