What to Expect When Buying a House After Retirement
May 17, 2018
You’ve just about done it – you are almost there. After spending the last chapter of your life raising children and growing your career, retirement is just around the corner and it’s time to have time just for you! From traveling, to exploring new hobbies and building a community around new and existing friends, this chapter in your life is exciting and filled with lots of opportunities for changes. As you start to make your retirement plan, you may determine that your current home may not be ideal for your new lifestyle. To decide if you may want to consider moving around your retirement, ask yourself:
- Do I have the right amount of space in my home?
- Is there anything I wish I could get rid of, add, or change within the structure of my current home?
- Is this the right state/city/neighborhood for me?
- Without a job or children’s events to account for, does my community offer the activities and amenities I want?
With a renewed focus on you, owning your dream home should be an important consideration at this time. While it may not be the first home you purchase, or even the second, the situation and buying process this time around may be slightly different. Here are some things to keep in mind while you start your search for your dream home as you approach retirement.
Buying a Home After Retirement
Make a list of your dreams and aspirations in retirement. What are the things that are most important to you? Do you want to travel, or do you want to be closer to your family? Do you want to try new things, or do you want easier access to the actives that you enjoy the most? Writing out your wish list will help you understand the things that are most important to you. From there, you can then think about how your home fits in with your future plans. Some specifics you may want to consider include:
- What state and/or neighborhood do I see myself living in?
- How many bedrooms do I need? Don’t forget to consider visiting family!
- What other spaces (library, art studio, movie theater, ‘man cave’, etc.) do I want?
- How much time am I willing to spend on upkeep and maintenance?
- Is a multi-story or ranch-style home ideal?
- Do I want access to shared community amenities and activities?
Once you have a good idea of the types of things you want in your next stage of life, start thinking about how to make those dreams a reality. Here are some things to keep in mind as you start formulating your retirement plan.
Downsizing for Retirement
Since the kids flew the coop, your current home may feel too large to keep up long-term. In this case, you may want to consider downsizing to a smaller property. If you want a home that requires less upkeep and gives you more freedom to travel, downsizing to a home with less square footage, or even a condo, may be a good option for you.
After retirement, many people choose to see if they can cash in on the equity they have gained over the years and move to a smaller property. Yet, downsizing does not mean you must give up all amenities. By purchasing a home with flex spaces, you can still have room for all the things you enjoy within a smaller, more manageable space.
Upsizing for Retirement
On the other hand, it may make more sense for your next home to have more space than you currently have. As your extended family continues to grow, you may want extra bedrooms in your home so that your family and traveling friends can stay comfortably when they come to visit. Features such as large great rooms, open kitchens and outdoor entertainment spaces create inviting locations to welcome in visitors – no matter if it’s for an evening dinner party, cocktail hour or extended stay.
If you have elderly parents, or adult children, you may want extra space in case they stay with you longer term. Casitas or homes designed with separate living suites allow for visitors who may stay for longer periods of time to have their own space (and for you to keep yours private as well!). In addition to that, you may want a space for that art studio, billiards room, or movie theater you have always wanted. Retirement should be about you and upsizing may allow you to explore the hobbies and activities that you love, more fully.
Considering Buying a Home for Retirement Early
Like we mentioned before, buying a home when approaching retirement is often a different process than purchasing your previous homes. Steve Berry, National Director of Sales for Trilogy by Shea Homes, recommends beginning the process early, especially aligning on budgetary planning so that you have time to explore communities that align with your geographic desires, amenity wants and floorplan needs while also fitting into your budget criteria. If you’ve done all of the research before retiring, you’ll be better set to find your dream home quickly.
Getting a Mortgage in Retirement
It’s important to keep in mind that in retirement, your financial situation is changing and this could affect the mortgage process. Laury Richard, Senior VP of Sales and Marketing at Shea Mortgage (SM), recommends that this is a time to be very open and honest with your SM loan originator about your retirement plans, financials and home wants. By partnering with an SM loan originator, you can come up with a plan to best fit your situation and feel most prepared. A few pointers Laury often gives to potential buyers who are thinking about buying a new home around retirement include considering:
- If you will be transferring assets between accounts and/or if you may be opening any new bank accounts. Save all your bank statements from new and old accounts for the last 60 days. This may require additional paperwork and documentation, so you will want to prepare for the situation.
- Putting off large purchases until after closing on your new home. This may not be too different of advice than you received when purchasing other properties, as new credit requests and inquiries will show on your credit report when applying for a loan. While it may be something you know, it may be more difficult if you have the feeling you want to splurge after retirement!
- At what age you are retiring? If you are purchasing a home after your retirement, but are not ready to take your social security distributions, additional verifications during the loan process may be needed. It’s nothing that can’t be overcome, but something you will want to disclose and prepare for.
- Federal requirements that specify home loans are applied for using precise qualifying criteria versus solely on assets or credit.
Another item Steve sometimes tells homebuyers to consider is the option of renting during their home buying journey. This allows you to sell your previous home and lets you focus on the search for your new home, letting you act quickly when you find the perfect home for you. While he admits no one likes the process of moving frequently, it may save you work and headache in the end!
Best 55+ Retirement Communities
Because each person’s retirement vision is unique to them, the notion of what is “the best” retirement community completely depends on your individual needs and wants. When deciding what is “best” for you, remember to keep in mind what you listed earlier about your ideal location, the activities you would like access to, and the property sizes offered.
Retirement is a new adventure, offering you more time to explore and try new things. If you are looking for a community that was built specifically with the goal of bringing people together to explore, adventure and create new memories, you may want to take a look at Trilogy by Shea Homes 55+ communities. Trilogy communities are recognized throughout the country and have won numerous awards for their locations and amenities offered. From social gatherings, to easy access to a variety of activities, buying a home within one of these communities will allow you to fully embrace all the benefits this new stage of life offers.
If you’re interested in learning more about Shea Homes and Trilogy communities, contact us today!
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