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When is the right time to buy a house for your retirement?

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By : James Hardy    99 or more times read
It’s a question that will be on many minds in recent times – you want to buy a smaller property for your retirement, possibly in a new location, but should you buy it now, or wait until you are closer to retirement age?

As with any house purchase, you will need to look at the current housing market. Recent indicators would point towards a recovery in the housing market during 2011, but the process is expected to very gradual at best. At the moment, house prices are certainly at a low, and mortgage rates are also down. However, getting a mortgage can be a little more difficult, as banks and mortgage providers try to re-coup their recent losses. Deposits are at an all time high – first time buyers can be expected to pay up to 20% of the house price to secure a property.

Of course, if you already have a property, deposits and initial outlay may not be a problem, but getting a new mortgage could be. Generally speaking, upon retirement, most people will choose to down-size. Although you won’t get an amazing price for your existing house, the knock on effect means that you can probably get your ideal new home at an equally low price, with little outlay. If you will require a new mortgage to move, you might want to consider making the move while you are still working.

So, in short, here are the two main reasons why now may be the best time to purchase a home for your retirement:

  • Mortgage rates: Interest rates are currently at the lowest for many years. For example, at the time of writing, you can get a re-mortgage at an initial rate of 1.99% for 2 years, increasing to 3.5% after this term. Many lenders are also offering longer-term mortgages at just 2.3%. This is a huge difference to just a few years ago, when you’d expect to pay more than double that interest amount.

  • House prices: Are also at their lowest for many years. Although this will also apply to your current house, if you are in the position where you have fully paid off your existing mortgage, you could be in a very good position when choosing a new property. The market is certainly fluctuating slightly in different areas, but prices are set to remain low for some time to come. Certainly, we are in the midst of a buyers’ market, and if you don’t have to worry about an initial deposit, you will have wealth of properties to choose from when looking for a retirement home.

In summary, it would appear that now may just be the right time to buy your retirement home. Take advantage of the lower house prices and interest rates while you can, don’t look back and regret not moving sooner! Preparation is the key, so assess your needs fully before you view any properties.
If you’re thinking about retirement you might want to visit this website first: Property bought for cash.

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