Challenges Seniors Face When Buying a New Home and How to Hurdle Them
It’s becoming more common for seniors to buck the “age in place” trend and opt to purchase new homes. Many seniors wish to downsize, as homes they owned for decades become too large to manage now that they are getting older and all their children have grown up. Some seniors are buying new homes closer to family that’s moved away. Other seniors are leaving their multi-level homes for ranch-style homes. Many just want a change of scenery.
Whatever the reason, seniors are bound to face some challenges along the way. Here are some common hurdles and how to overcome them.
Financing seems impossible
Many seniors live on a fixed income. Some recently suffered the loss of their spouse, whom they depended on for financial support. Without solid income, it may be difficult for seniors to get a traditional loan for a new mortgage.
Some seniors can buy a new home outright with cash or through a typical loan. If you can do this, it’s likely the best option. Of course, this isn’t the most common circumstance. One option is to use assets – stocks, bonds, and other assets – as collateral for a new loan.
If that’s not an option, it may be time to think about financing your new home with a reverse mortgage – the government’s Home Equity Conversion Program (HECM) –
“The HECM is FHA’s reverse mortgage program that enables you to withdraw a portion of your home’s equity. You can also use a HECM to purchase a primary residence if you are able to use cash on hand to pay the difference between the HECM proceeds and the sales price plus closing costs for the property you are purchasing,” explains the Department of Housing and Urban Development.
You can also investigate bridge loans – offered by some banks – which “allows a current homeowner to borrow 100% of the cost of a new home and repay all or most of it back at the closing of the existing home,” according to Seniorific.com.
Moving seems like too much of a burden
Once you’ve figured out the financial part, the fun is really just beginning. Moving to a new house at any age can be stressful and difficult, but this can be magnified as a senior citizen. It’s important to develop a strategy for packing (and the inevitable downsizing) and physically moving all of your belongings.
Most seniors downsize when they buy a new home. If you’re moving to a smaller home, it only makes sense that you can’t keep all of the stuff you currently have in your home. Downsizing can be difficult, as we tend to collect more and more items – many of them sentimental – over the years. But you’ll find that taking some time to donate, sell, and just toss some of the clutter in your home will make your new living experience much more comfortable.
One way to get past the initial hurdle of downsizing is to start at the least-used rooms in your current home. This usually means storage rooms – attics, basements, and closets – as well as guest bedrooms. Here you’ll find much of the stuff that you don’t use on an everyday basis.
Always have boxes ready for packing things up. Whether you’re keeping it, selling it, or donating it, putting the item in a designated box will prevent you from second guessing yourself later.
When it comes to moving, you’ll likely need to hire some professional help. Take the time to do your research – both online and in person. Ask moving companies to quote you specific prices – don’t sign blank contracts and don’t be taken for large sums of up-front money. The more you can pack up in boxes before moving day, the more time and money you’ll save (as most moving companies charge extra for boxes and materials and the fee is based on hourly rates).
There are plenty of benefits to buying a new home as you age, and there are also some hurdles. By figuring out your financing, downsizing strategies, and moving plans as early as possible, you can make the process less painless.
Photo Credit: Pixabay.com
Author: Jim Vogel