Retirement: Stay or Move?
You're retiring, and the big question now is "Should I Stay or Should I Go?" Is this a good time to move? The answer to that question will be up to your finances and your lifestyle. Keep reading to learn about some of the different factors that you'll need to take into consideration...
Staying Put: Packing up and selling a loved home with so many memories is a difficult decision for many longtime homeowner. One viable option open to senior homeowners is the reverse mortgage, which allows homeowners to turn the value of their home into cash without having to move or repay the loan each month. Guaranteed by the U.S. Department of Housing and Urban Development, HUD offers seniors a federally insured private loan as a means to provide financial security and supplement social security, meet unexpected medical expenses, make home improvements, and more.
The money from a reverse loan may be paid to the borrower in a variety of ways, from a lump sum to a regular monthly cash advance, as a credit line account or in any combination of the above. Typically, borrowers do not have to pay anything back until they permanently move out of the home, sell, or pass away. Eligibility for most reverse mortgages requires that the home should be owned outright by the applicant, and that the applicant is 62 years of age or older. Visit AARP’s website and use their Reverse Mortgage Calculator at www.rmaarp.com.
A reverse mortgage offers retirees a distinct advantage. Since most lenders require that borrowers have some sort of income so they can determine a borrower’s ability to pay back the loan, many retired seniors simply cannot qualify for a traditional home equity loan. But a reverse mortgage does not require monthly payments, and therefore no minimum amount of income is required for the loan application. Most reverse mortgages require no repayment as long as the owner, or any co-owner, lives in the home.
The best way to determine if a reverse mortgage is the best fit for one’s retirement plan is to honestly assess the following:
Jumping into borrowing money for a reverse mortgage is not advised until looking into all of these senior living options. By being honest about current needs and housing trends, and exploring all the options, seniors can rest easy that they have selected the best housing choice that custom fits their particular budget and lifestyle needs.
Pack It Up: Being realistic about your life, finances and longevity is a must if you decide to move to another community, says Calvin Chamness, real estate agent/developer and builder with JW Development Inc. “You have to think about your health and your future,” advises Chamness, “and expand your thinking beyond the average life expectation. Make sure that you’re close to hospitals and doctors that can provide you with the best care. Do they accept your insurance? All of this needs to be considered when moving from your current circle of friends and community to a new area. This is where a real estate agent can really help a person or family trying to find a retirement situation for someone, as they have access to the most current facts and figures to help you make an informed decision.”
“Many who are making these decisions for themselves need to learn to be a little bit selfish,” says Chamness. “I mean, be selfish in a good way,” he laughs. “Move to a community or area that you enjoy. Many of my senior-aged clients are downsizing their lifestyles and selling a home they’ve owned for 30 years. They’re trading down in price range, want to be in a good area and need to select a home that’s a good investment for them. If your health is good, and you’re reasonably active, you also want an area with residents of a similar age and situation – just like you, they’ve raised their kids, have a lot of interests and a lot to talk about, and can help each other.”
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