If you’re over 60 and buying a house, you may second-guess making such a commitment. Whether it’s your first home or your 10th, unless you’re buying the house with cash, you’ll probably take on a 15- or 30-year mortgage, and a good chunk of your retirement budget will be monthly house payments. You may be locking yourself into years of home improvements and home maintenance. You also may have children or grandchildren who think you’re about to purchase a future hassle for you and them.
But you may have good reasons to buy a house in your senior years. Maybe it’s time to downsize or you want a warmer climate. Maybe mobility or family reasons are driving the move. Considering all of these factors will help you make the right decision for your situation.
[Rightsizing Vs. Downsizing Your Home]
Credit
Just about every homeowner, regardless of age, worries about their credit to some degree. If you’re a senior citizen, will a financial institution lend you the money for a home?
If they don’t, it isn’t because of the year you were born. According to the Equal Credit Opportunity Act, lenders are not allowed to discriminate based on age.
“It isn’t any more difficult or easy for a senior adult to get a mortgage than anyone else,” says Nikki Buckelew, founder and CEO of the Seniors Real Estate Institute in Oklahoma City. The institute offers training and coaching for real estate professionals who work with seniors. Buckelew also co-owns OKC Mature Moves, a downsizing and relocation service, and works as a downsizing coach.
“It is literally about their current financial qualifications, including debt to income ratios, work history,” Buckelew says.
She says there’s no way to measure whether it’s easier or harder for a senior citizen to buy a house because it’s such a broad term.
“Are we talking about 65-year-olds who are working because they need to supplement their income to afford to stay in their current city, 75-year-olds recently retired and now on fixed income, or 85-plus-year-olds selling a home they have lived in for 60 years and buying a home with 50 percent cash down and putting 2 million in the bank?” Buckelew says.
The bottom line: Your age doesn’t matter to mortgage lenders; your ability to pay for the home does.
[READ: 2024 Most Affordable Places to Retire]
Cash or Mortgage Payment?
If you’ve built up your savings over the years, you may not want a mortgage, preferring to buy a house outright. Buckelew says, in the last couple years, many of the older senior homeowners she has worked with have paid cash.
“They don’t want to have debt and they don’t want to leave a house to their kids or heirs with a mortgage on it,” she says. “It’s less about affordability and more about legacy and their aversion to having a home with a loan on it.”
Buckelew adds that younger seniors — “boomers who don’t want to be referred to as seniors,” she says — don’t have an aversion to having a mortgage.
“They will, in fact, mortgage a home at 100% if possible,” she says. “It’s a different generation we are dealing with.”
The bottom line: It depends on your comfort level with debt. If you feel like you can comfortably make a monthly mortgage payment, whether you’re collecting Social Security or living on a fixed income (maybe even a robust one), then taking the home loan may be the right choice. If you have cash reserves, decide how you’d feel about dipping into them.
Aging in Place Issues
Think about how your home will fit your lifestyle 10 or 20 plus years from now. (This is good advice, even if you’re a 20-something homebuyer and believe you might not be going anywhere for a long time.) Choose a home that will be adaptable for long-term independent living.
“It’s very important to buy property that fits your physical needs not just now, but in the years to come,” says Olga Neulist, senior global real estate advisor and associate broker at Sotheby’s International Realty in New York.
“For example, I was selling a property in New York City with multiple steps to get up to the lobby and that alone was an understandable deterrent for some,” Neulist says. She recommends envisioning what your life might look like from day-to-day now and in the future before making a purchase.
You might want to consider whether the home will accommodate a change in your health, says Lindsey Harn, a real estate agent with Christie’s International Real Estate in San Luis Obispo, California.
“If you got to the point where you might need more assistance, is it laid out well for a caretaker to be on-site?” says Harn.
The bottom line: How are you going to feel about this home in the future versus today? Those marble kitchen countertops might be what you always wanted, and you may love the gazebo in the backyard, but can you imagine dreading walking up and down a flight of stairs in another 10 years? On the other hand, if you think the daily exercise is just what your future self needs, maybe that house is the one.
[READ: Remodeling Projects to Make Aging in Place Easier]
Is the House Ready to Move Into?
If you’re a senior citizen, you may not want a fixer-upper, Neulist says.
“Most buyers looking for real estate in their 70s and 80s wish to have a move-in ready home,” she says.
The ease of the move-in process and whether you’ll walk in with numerous home improvements on your to-do list are worth careful consideration, Neulist says.
The bottom line: You may enjoy home improvement projects and feel like you always will, no matter your age. But if that’s not you, and never was, it may be even more important to buy a home that won’t need a lot of TLC after you move in.
Your Own Comfort Level
Your comfort level and your financial picture are the most important factors. If you’re ready to commit to a home purchase and it won’t be a financial hardship, follow your dream.
The bottom line: “You could obtain a new 30-year mortgage at 110 years old,” Harn says. There should be no issues with senior homebuyers landing a mortgage “as long as your income supports the monthly payment,” she says.
Pros and Cons of Buying a House After 60
Pros:
— Having a home that meets your retirement lifestyle.
— Building equity is a good move at any age.
— Homeowner tax deductions.
— You can pass an asset on to your heirs.
— Stable housing costs compared with renting.
Cons:
— It can be a financial risk. Will the home grow in value? Will closing costs or monthly expenses crimp your budget?
— Maintenance and repairs can be a hassle; you may have to hire someone for certain jobs.
— Future mobility or health issues can change circumstances.
— Less flexibility if you need to move.
— You are responsible for property taxes, repair and insurance costs.
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What to Know About Buying a House When You?re 60 and Older originally appeared on usnews.com
