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Why Clever People Buy Retirement Homes Before Retiring

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If you are planning to buy a retirement home when you retire, you should think about buying it before you are actually retired. Here are some of the reasons clever people take that route instead of starting the process of house buying after their retirement:

Easier Mortgage Approval

Mortgage providers consider many things when deciding which size of mortgage to award or what interest rate to charge. One of these factors is your cash flow; the mortgage provider has to be sure that you will be able to repay the loan they are about to give you.

This is important because most people experience reduced cash flow after their retirement. If your finances take the same route, it means you are likely to qualify for a better mortgage (more money at good rates) when you are still working than when you will be able to get when retired.

Head Start on Mortgage Payments

If you buy your home after retirement, you may end up servicing the loan for the rest of your life. Most people don't want this; they want some of their retirement years to be debt free. If you are of the same mind, then you can make your dreams a reality by buying your retirement home a few years before your actual retirement so that you only service the loan for a few more years into your retirement.

Adequate Cash for Regular Expenses

If you really want to afford a house, you should be able to afford the actual purchase and have some money left over for regular expenses. Things like property taxes, utility bills, property maintenance costs, and home insurance premiums are not cheap and have to be factored into the budget. Since your finances are likely to be stronger before your retirement, buying the retirement home at this time means you will be best placed to handle the expenses.

Adequate Time to Prepare the Home

When you buy a retirement home, it's possible that it will not be in your ideal state and you will have to customize a few things here and there or make a few upgrades and renovations. For example, you may have to redecorate the lawn, plant a few more trees, and finish the basement, among other things. Buying the home before you are actually retired gives you the opportunity to take care of these things so that your retirement home is in a perfect state by the time you are actually retired and ready to live in it.


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