5 Reasons Buying Your Retirement Home Before Your Retire Is Important

Planning to leave the workplace sometime in the next five to 10 years? Buying your retirement home now can pay off big in the long term, particularly if you’re going to get a mortgage.

There are more financial benefits to purchasing your retirement home while you’re still working full time. Here are five reasons why you should buy now rather than wait until you retire.

1.  Easier to get approved for a mortgage

When mortgage lenders evaluate your loan application they look closely at your debt-to-income-ratio, 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. If you wait until your retired to apply for a mortgage, you could be limiting what size loan you can qualify for.

2.  More cash flow for Renovation

Set a budget on the work you plan to do to the home. By working full-time during this period, you’re also protected financially if you uncover a major problem with the home. It is nice to have an income while you are doing the updates right away.

3.  A head start on paying off your mortgage

It is a great goal to be debt-free when you retire, which is why it is important to purchase your retirement home before you actually retire. By starting to tackle your mortgage debt while you’re still actively working, you’re in a position to accelerate your payments to pay it off faster, where you wouldn’t be able to do this when you are retired.

4.  Plan better for the long term

Many people don’t know what living expenses will be in retirement. 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.

5.  Expand your portfolio

If you’re financially able to carry two mortgages at once, it may make sense to buy your retirement home now and rent it out for a few years until you’re ready to move in. Owning a rental property could also help you retire sooner, since you’re adding an extra stream of income that you can put toward your mortgage.

Looking to purchase your retirement home? Contact Mandy Kruse

Looking to see what you would get pre-approved for? Contact Maria Jondahl