Why You Should Try and Buy Your Own Home Before You Retire

If you have been thinking about downsizing or moving to a new house for your retirement, you may be trying to decide between renting your next home or purchasing one. And if you have always rented your home, you may be wondering if you should finally switch to a mortgage and own a home instead. Should you try and buy your own home before you reach retirement? The answer is yes, and you can read a few of the reasons why below.

It Will Be Easier to Get a Loan

First off, once you are ready to start searching for your dream home, you should learn how to get prequalified for a home loan that you can affordably pay off each month. And the good news is that it will actually be easier to get a mortgage when you are older because your debt to income ratio should be more favorable and lower than it used to be.

You should find that, when you are ready to apply for a loan, you qualify for a great option from a reputable mortgage lender. It should also become obvious that you can get a larger loan because you are still employed full time. Once you retire and you no longer have full-time employment, your debt to income ratio will change, and lenders may not be as willing to give you the loan that you need to purchase a home. 

Your House Can Be Paid Off by the Time You Retire

The last thing that you want to do is have a lot of debt when you retire because you will be on a limited, fixed income after you stop working. By purchasing your home before you enter retirement, you will have a higher chance of paying off your mortgage in full so that you can spend your golden years only worrying about covering your typical monthly expenses and your yearly property taxes. This will make retirement more affordable, and you will be able to have more money to spend on other experiences, rather than having to spend all of your money on your mortgage or on rent, which can increase from one year to the next.

You Can Rent Out Your Future Retirement Home

If you purchase your retirement home in advance, you can rent it out and continue living wherever it is that you are currently living, whether you are currently renting or you are in a house that you own. This is a good option if you are able to generate enough income to pay off two mortgages. It could also be advantageous because you could rent out the retirement home, use that money to pay off that house, and then sell your primary residence when you are ready to retire so that you have a lot more money to get you through your retirement years comfortably.

You Have More Money for Repairs and Renovations

When you purchase a home, it is likely that there will be quite a few renovations or repairs that you will want to make to the property prior to moving in or shortly thereafter. While you are still working full-time, you will have the cash flow necessary to make those renovations, but once you retire, you would have to dip into your savings to make any changes to your home. Therefore, buying your home before retirement will give you the opportunity to personalize it and have it just the way you like it before you retire.

Plan Out Your Savings and Your Retirement Expenses

Long-term budgeting and planning for retirement can be a daunting process. When you throw a mortgage in the mix, it can be made even more difficult. But if you purchase your home in advance, you can effectively budget just how much you will need in order to cover your housing expenses during retirement. You will have a much more realistic idea of what your savings will be and how much money you will need to retire comfortably, without having to factor in the cost of a new home, which could be difficult to calculate until you actually start searching for the right home.

As you can see, there are several great reasons why you should focus on buying your home before you retire, rather than after you have entered retirement. You will ultimately be able to live comfortably, and you will not have to worry about moving if you love where you live and if your home provides you with everything that you need.