It is quite exciting and at the same time quite challenging to save money to buy a home after retirement. You were probably dealing with other important things in your life when your friends were investing in properties. A lot of future retirees are looking to buy a beautiful home in a charming 55+ community when they plan to retire. It is a completely normal thing and that’s why you are never too late to save money for a retirement home.
It might seem a little daunting to manage your funds because property prices rates are getting costlier even though you can find some good rates on mortgage refinancing. Do not let it make you drop the plan because you will not like to live a tenant’s life after your retirement. Continue reading to learn how to increase your saving to buy your retirement home.
Saving Money to Make a Down Payment
A down payment is the amount of money you put down on your dream retirement home. If you are still young and want to buy a beautiful home after retirement, you can start saving money now.
You can plan earlier if you do not want a get a mortgage. You may have to invest 15% of your monthly take-home pay for retirement to save enough money. Open another bank account for your savings and keep investing for the next 15 years. That’s how you can probably save enough money to make a down payment.
However, property prices can rise quite rapidly. What if the competition is quite high when you plan to buy a retirement home? Many other potential buyers would compete against you in the same price range. Then, you will have to pay more to buy your retirement home. In such situation you can resell your current home to arrange money for the down payment. That’s what many active adults do when then plan to buy a retirement home in a beautiful community.
Other Things You Must Consider When Saving Money for a Retirement Home Down Payment
Every home lender might act like a well-wisher and probably your best friend, but he isn’t! Several other costs are associated to a mortgage, which remain hidden. Things like PMI, appraisal and inspection fees, closing costs, etc. increase the cost of monthly mortgage payments. Many people pay for these fees because they bought a retirement home by using their mortgage. You should carefully assess every factor when applying for a mortgage.
Try to unveil every hidden fee which affects your monthly home loan or mortgage payment. It will be beneficial for you to start saving money for the retirement home before you retire. Think about it if you still have 10-15 years to get retired. Begin with setting a down payment fund. Create a new budget in which you will save a considerable amount of money for making down payment for home. You will get many opportunities of earning extra income. Earn more and save that money for the down payment.
There are some unnecessary expenses you can avoid to save money for your retirement home, according to Cheapism. There is also some good advice from this page. Start eating home-cooked food, cut the cable, avoid gym membership, make your beverages at home, earn more by working overtime, and think about a second job. You will have to try these things if you want to save enough money for retirement home. You might find it difficult in the beginning but soon it will become a good habit. You might even save more than you need to buy a retirement home.
Things to Consider When Buying a Retirement Home
It might not be possible for every homebuyer to buy a new home twice after retirement. Therefore, you would like to buy in the best retirement community in your first attempt. Consider the following things you will get a beautiful home to live when you are 55+.
- The size of the property:
There would be probably two people living in that retirement home. Therefore, it is not necessary to buy a large home with multiple bedrooms. A home with smaller configuration would also work great for you. It will cost an affordable price and you can still get some beautiful floor plans to choose from.
- Pick the best location:
It is the location that determines how costly or affordable a property will be. A new home in a busy city area can cost a lot of money. It is also not the best place to live after retirement. That’s why many active adult communities are located 5-10 miles away from the city. Like Oak Run in Ocala, FL which is considered one of the better adult communities in Florida.
- Check the amenities:
You are going to pay a lot of money to buy your retirement home. You might be saving money for this day for a long time. Therefore, you would like to get the best out of your investment. Meet a real estate broker who specializes in this niche. Ask him to provide some great choices based on your demands.
You will find a beautiful house with an impressive floor plan. Don’t just agree now because there are many other things to consider. Check the amenities you will get with the home if you choose to live in a 55+ community. Carefully check the additional costs you will have to pay while living there. It will help you in selecting a perfect home to enjoy your retired life.
While many retired couples consider buying a retirement home, some have considered buying their own RV instead. This is certainly something to consider if you like travelling around and visiting places you’ve always wanted to go to.
Final Thoughts
Everything seems difficult when we try it for the first time. Saving money to buy retirement home is no exception. You can make it simple if you plan early or you can always apply a home loan. People plan early about the retirement because they do not want to struggle with their finances after getting retired. Although you have other responsibilities now, a home is also needed to live a peaceful life. That’s why you should follow the way explained in this post to increase your saving to buy your retirement home.