Retirees look forward to spending time relaxing, traveling and spending time with friends and family. They often combine these activities in buying a vacation home. But making this type of purchase can be a huge step for people who live on a fixed income or who are unsure whether to take out a mortgage in their later years. If you are thinking of making this type of purchase now that you have retired, consider the following carefully when making your decision.
1. Can you afford a vacation home?
Your first attention should be the price. If you are a retiree whose main residence is paid off, you are in a better position to make a purchase, as you have equity in your current home and may be able to use it to obtain an equity loan to help you pay for your holiday property,
Keep in mind that a higher down payment often leads to a lower mortgage rate and lower monthly payments, so the more you can afford in advance for your holiday property, the better.
Another option that can make this option more affordable is to work with a credit union rather than your traditional financial institution. Credit unions often offer members lower mortgage rates, so it’s worth shopping around for a mortgage before committing to the bank that held your primary residence mortgage.
Keep in mind, however, that a vacation home mortgage will not be your only expense. You will also need to be able to afford homeowners’ insurance, energy bills and other utilities, regular maintenance, repairs, property taxes and potential property management fees, especially if your holiday property is significantly away from home. your residence.
2. Do you have enough time to engage with a vacation home?
Retirees often retire, assuming that they will have all the time in the world to do what they want. However, they often find themselves even busier when they retire because they travel to visit family, spend time with grandchildren and help look after a child, take time to get in shape, visit more doctor appointments and volunteer.
Planning time in your home is a must, so you can take care of the property and make the investment worthwhile. If you already find it difficult to take the time to do everything you want to do, buying this type of retirement property may not be for you.
3. Will your vacation home accommodate your family?
Many retirees wonder if they have time to visit a retirement property and family by buying a second home that their family likes and serves as a vacation center for everyone. The trouble is that the bigger the property, the more expensive it is. You will need to find a home option that can accommodate your family and budget, and this often means a home with large bedrooms or a finished basement that can accommodate inflatable mattresses or sofa beds for visitors.
You will also want to make sure you have enough bathrooms and a large enough kitchen or dining room for everyone. If the costs become too high for you to be the sole owner, consider buying the property with other family members.
You will also need to consider how often and when your family will want to visit your holiday residence. If you are the sole owner and renting a home is one way to afford it, you will need to be very aware with your family that there are certain times of the year that they cannot visit because you will be renting the home for income. The seasonal and holiday requirements for the property can handle a lot, so you’ll need to make sure you’re ready to say no to someone when the time comes.