Are You Too Old to Buy a House?

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Is there an age at which the dream of home ownership has passed? Absolutely not! However, when you're buying a home later in life, you have different considerations to make or your dream home could turn into a nightmare. 

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Many baby boomers and even older seniors are becoming first-time homeowners.  According to the 2017 NAR Homebuying Report, almost a quarter of first time home buyers were over 52 years old. Thirty percent of all home sales in 2016 were made by baby boomers age 52-70, and 8% of home purchases were made by seniors age 71-91.

With this many older buyers, you're in good company. However, is buying the right choice for you? Consider the following issues when making this decision. 

1. Is buying a good financial move?

In 2016, 68% of buyers aged 62-70 financed their home. If you're planning to take out a mortgage to make your home purchase when you're in or about to enter retirement, look carefully at the financial impact.  

Consider your financial situation to be sure you will be able to make the payments throughout the life of the mortgage, even if your income drops after retirement or if a spouse passes away. Review any life insurance policies you have for you and your spouse or consider getting insurance.

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Even if you plan to keep working, you or your spouse may retire sooner than you plan.  According to the TransAmerica Center for Retirement Studies, 60% of retirees surveyed retired before they planned, mostly because of reasons other than being financially ready. If you need to retire because of health concerns or other reasons, will you still be able to afford the house payment?

While the mortgage costs in a conventional loan will remain constant, taxes, insurance, and homeowners' association fees will continue to climb.  Be sure you will have funds to pay these fees as they increase over time. It is also wise to make extra payments on the mortgage if possible to pay it off faster. 

2. Will this home fit your retirement lifestyle?

Consider why you want to buy a home and what activities you plan to enjoy during retirement. Make sure that you and your spouse understand each other's expectations. If one of you dreams of retirement days spent volunteering and having the grandkids visit the house constantly while the other wants to travel the world, you will likely be looking at very different types of houses. 

Are you buying because you are moving to a new location to enjoy your retirement? If so, have you spent significant time in this new location to be sure you love it before making it a permanent home? It would be terrible to uproot your life and move to Florida only to realize you miss your grandkids or you don't really like the heat, bugs, or the company of other retirees. 

If you plan to do significant traveling in retirement, consider how much it will cost to pay for lawn care and other maintenance while you are away.  Moving to a condo or retirement community that does the lawn care for you may be a better plan. 

3. What type of home maintenance is involved?

You may be able to manage your own yard work and repairs when you move into the home. However, as you age you may need assistance with these tasks. Consider the extra funds you will need to hire a lawn service and pay a handyman to do home repairs.  

If you're moving into a senior community that takes care of these tasks for you, be sure to understand the additional fees.  Since these fees increase over time, ask at what rate they've been increasing to be sure you can continue to afford the payments. 

4. Will this home still be suitable if my health declines?

If you're moving to a home you plan to stay in for as long as possible, keep in mind that your health and fitness may change. Choose a home design and location that will be suitable as you age.

Climbing a flight of stairs to a master bedroom may not be an issue now. However, it would be wise to consider a single story home or a home with a first floor master bedroom with laundry on the first floor. Look for a home with updated windows that tilt in for easier cleaning or consider updating the windows when you move. 

Remember that there may even come a time when you are not able to drive. If possible, choose a home located near public transportation or within walking distance of shops.  It may be challenging to have to depend on friends or family to drive you to shopping or appointments. 

Many seniors choose to live with family members.  You may consider pooling resources with an adult child to purchase a multi-generational home with an in-law suite. You get constant access to spoil your grandkids, and your adult child will be able to assist with your care if you need it in later years. 

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