Once you leave the workforce, you likely have some goals you want to accomplish. For many, these goals are easier accomplished after downsizing, or moving into a smaller, more maintainable home.
There are many paths people can take to downsizing their homes, but one opportunity seniors have available to them is the LifeWise Mortgage, also known as a home equity conversion mortgage, or reverse mortgage. With a HECM, instead of making a monthly mortgage payment, your home equity is paid to you in cash. HECMs can be paid in one lump sum, in monthly installments or as a line of credit.
Three common reasons seniors choose to downsize their homes:
Less Home to Clean
At one point, your home was probably the perfect size. Maybe you had several children running through the rooms, or a small business you ran out of a home office.
Over the years, your house served these priorities well. But in retirement and with the kids grown and living in their own homes, there will be unused rooms throughout that you still have to dust and vacuum.
Plus, if your property includes a big backyard or a large plot of land, you will still have to maintain it. For many people in retirement, these chores become increasingly challenging to keep up with. When you downsize, though, you can choose a home that’s perfectly sized—or a retirement community that will lessen the burden of daily maintenance tasks.
Free Up Income
The biggest reason for downsizing in retirement is to decrease monthly housing costs, Time Money reported. A smaller house will probably come with smaller bills. However, it’s important to do your research on this.
Maybe your mortgage will be smaller, but also be sure to consider your utilities, property taxes, homeowners association fees and any moving costs that come with your new location. For example, perhaps your new abode requires you to replace your furniture or drive further to get to the grocery store or doctor.
Age in Place
More seniors are choosing to continue living in their own homes rather than move in with family or long-term care. According to a survey from AARP, 80 percent of respondents ages 65 or older said they believe their home is where they will always live, and 90 percent said they want to live in their home for as long as possible.
Many times, seniors find that their homes don’t support aging in place well. Narrow doorways that don’t allow walkers to pass through, steep staircases and slippery shower floors are all common issues retirees eventually need to address. By downsizing early on in your retirement, you can anticipate the needs you’ll have down the road, and make a home purchase with these requirements in mind.
Every retiree is unique and will have different goals for their golden years. Many people, regardless of their retirement dreams, choose to downsize after they leave the workforce. This goal is much more attainable with a reverse mortgage. If you’re thinking about downsizing your home after retirement, reach out to The Federal Savings Bank to learn more about our LifeWise Mortgage.
By Shaun Meller