Why you should buy your retirement home before you retire

Zillow Porchlight

If you’re looking to retire in the near future, there could be a variety of financial perks for purchasing your retirement home now, rather than waiting until after you retire. In this Zillow Porchlight article, Daniel Bortz shares 5 reasons why you should buy your retirement home while you’re still fully employed. 

Easier to get approved for a mortgage

When mortgage lenders evaluate your loan application they look closely at your debt-to-income ratio (DTI) — your total monthly debt divided by your gross monthly income — which is going to be a lower, more favorable percentage while you’re fully employed.

Therefore, it’s easier to qualify for a home loan while you’re still earning a steady paycheck, says Mary Erl, a certified financial planner at Nest Builder Financial Advisors in Gurnee, IL.

Moreover, “by waiting until you’re retired to apply for a mortgage, you could be limiting what size loan you can qualify for,” says Todd Sheinin, a mortgage lender and chief operating officer at New America Financial in Gaithersburg, MD.

A head start on paying off your mortgage

Ideally you want to be debt-free in retirement, which is why many retirees decide to rent rather than own, says Erl. But if you choose to become a homeowner, the earlier you purchase your retirement home, the sooner you can start paying off your mortgage.

Additionally, by starting to tackle your mortgage debt while you’re still actively working, you’re in a position to accelerate your payments — a move you may not be able to pull off when you’re living on a fixed budget in retirement, explains Pitzl.

Plan better for the long term

Currently, one of the biggest challenges is predicting what your living expenses will be in retirement. It’s tough, given that you don’t know how much you need to budget for housing.

By buying your retirement home now, you’ll get a better picture of what your monthly expenses will be in retirement — and that means you can create a more accurate budget.

“If you have a mortgage in retirement, it’s probably going to be your largest monthly expense,” says Erl. “Knowing what your [monthly] mortgage payment will be is extremely beneficial.”

[Read the full article: Why you should buy your retirement home before you retire]

  1. December 28, 2016 NANCY CRAWFORD-BANE

    My family is moving to the Austin area in March (son-in-law promotion).
    It is only me and my 2 Chihuahuas. I want a small home (2 beds, 2 baths?)
    single story…anything to offer? I own my own home here in Cave Creek AZ and have excellent credit and perhaps a VA loan?

    Post a Reply
    1. December 29, 2016 Lennar

      Hi Nancy – thank you for your message! We’ve forwarded your question to our Lennar Austin team so they can provide details for you.

      Post a Reply
  2. December 31, 2016 Fay

    I am looking in the Northwest Houston TX area and would love to find an age restricted community that had smaller homes around 1,500 sq feet, two bedrooms homes or townhomes with attached garage for single retirees. Does Lennar have any plans to build for this demographic? Thank you

    Post a Reply
    1. January 1, 2017 Lennar

      Hi Fay – our Lennar Houston team can provide details about this for you. We’ve forwarded your message to them. Thank you!

      Post a Reply

View All

  1. December 28, 2016 NANCY CRAWFORD-BANE

    My family is moving to the Austin area in March (son-in-law promotion).
    It is only me and my 2 Chihuahuas. I want a small home (2 beds, 2 baths?)
    single story…anything to offer? I own my own home here in Cave Creek AZ and have excellent credit and perhaps a VA loan?

    Post a Reply
    1. December 29, 2016 Lennar

      Hi Nancy – thank you for your message! We’ve forwarded your question to our Lennar Austin team so they can provide details for you.

      Post a Reply
  2. December 31, 2016 Fay

    I am looking in the Northwest Houston TX area and would love to find an age restricted community that had smaller homes around 1,500 sq feet, two bedrooms homes or townhomes with attached garage for single retirees. Does Lennar have any plans to build for this demographic? Thank you

    Post a Reply
    1. January 1, 2017 Lennar

      Hi Fay – our Lennar Houston team can provide details about this for you. We’ve forwarded your message to them. Thank you!

      Post a Reply

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