When people think of their retirement, they sometimes forget to consider some of the most important people who can have a direct impact on it. Not their kids, other relatives, or even the people who manage their savings, but the mortgage providers who can offer something solid for retirement.
It is not just about the mortgage, but what you do with it. Remember that interest rates for savings can fall rapidly, and assets like homes are always going to hold some kind of value. In many cases, that value can grow significantly over time, creating a significant retirement vehicle in itself.
Waiting to Buy
For those who already have a home that is paid for, it doesn’t seem to make sense to buy another property. Thinking like that could cost many a sound retirement investment. Why wait to buy when the housing market is steadily improving? The house you can afford today might be out of your reach next year. Renters are still going to need a place to stay, pointing to the possibility of investing in rental properties.
Lack of Affordability
Buying a home is an investment on which you can see an almost instant return. This can be done in more ways than one. When you buy a home as an investment property, you don’t just charge enough rent to pay the mortgage, and the taxes and insurance. Rather, you charge enough to add a bit more to the payment each month so you pay it off faster, and pay less interest. Or, you can rent out the home you have that’s already been paid for, and enjoy an improved lifestyle.
Underestimating What You Need
The human body does not take well to aging. In the future, you may need larger hallways, a smaller yard, or a shower instead of a bathtub. Plan for the future by investing in what you may need later. If and when the time comes when you have a strong need for better accessibility and less space to clean, you may not feel up to house hunting. Do it while you can so you get what you really want and need for today, and well into the future.
Kids Come First
Yes, you should plan for your children, but you also need to plan for them to be a success. If you are keeping a large home so they always have a place to come back to, you are planning for their failure. On the other hand, if the plan is to hand the house down to them when you pass, you might want to think about what they would need and combine it with what you can afford.
Your savings are a cushion for the things you may need or want. You worked hard for this cushion, and it should not be used just for survival. If your current home needs repairs, or you want to invest in a new one, using that cushion may not be the best choice. Instead, use a portion of your savings for a down payment and take out a low interest mortgage for the rest. This way you’ll still have access to the majority of your savings in the case of a dire emergency.
If you’re looking to shop interest rates for a new mortgage, don’t hesitate to reach out to Anmtg.com today at 773-305-LOAN. One of our mortgage providers will be happy to run the numbers to see what type of home you can afford. We look forward to hearing from you soon.