Buying a Home in Retirement: Downsizing- By: Miranda Marquit
During retirement, we often think about how to better stretch our dollars. After all, the goal is to last longer than our money. One of the ways to make your nest go further is to downsize to a smaller home.
Run your retirement calculations to determine if you need to free up a few hundred dollars a month to live comfortably. Simply moving to a smaller house could be the solution you are looking for, since it results in monthly savings that can ease your retirement cash flow.
Receive a Cash Infusion When You Buy a Smaller House
Hopefully, you will have paid off your mortgage by the time you retire. Creating a retirement plan that ensures that your mortgage is paid off can help you reduce your monthly obligations, as well as provide you with the ability to buy your new, smaller house outright.
Use the money from the sale of your larger home to buy a smaller home. The difference in the prices is cash that you can use to help your retirement, whether you want to go on a trip, or whether you want to change up your investment portfolio. A little extra capital can go a long way if used right.
Don't be tempted to buy with another mortgage. All you need to do is use a home mortgage calculator to see how much a mortgage will cost you over time. On top of that, the goal is to reduce your obligations in retirement -- not add to them.
What if You Want a Bigger House?
Some retirees aren't interested in downsizing: They want to "upgrade" their lifestyle. Perhaps you want your home to be large enough to accommodate children and grandchildren when they visit. Before you buy a bigger home, though, make sure you run the numbers. Can you afford to pay the monthly mortgage?
Selling your older home can help, since it will provide you with a substantial down payment and the ability to avoid a huge mortgage. You want to make sure that your monthly retirement budget can handle the added expenses of a larger home -- especially costs related to utilities, as well as maintenance and upkeep. Remember that it's not just your mortgage payments you will have to worry about.
Bottom Line: Your home, with its mortgage paid off, provides you with options. You can downsize your lifestyle more easily with the proceeds from the sale of your home, or you can upgrade less expensively. Just make sure you carefully consider your options before proceeding.
Article Source : http://www.realestateproarticles.com/
Author Resource : Miranda is a freelance writer and professional blogger. She writes for numerous financial web sites and can be found at Planting Money Seeds.