Smaller Space, Bigger Pockets and More Time to Enjoy Retirement
The kids have flown the coop and now it’s time to spread your own wings. Downsizing at retirement is an exceptional opportunity to decrease your outbound cash flow and enjoy a space that doesn’t require continual maintenance. But the process isn’t without its hassles. In the following brief post, we’ll touch on a few points on how to scale down without feeling overwhelmed.
Choosing the right place
When you’re ready to pack up your four-bedroom family home, your options are endless. You might choose for a small townhouse in Dallas’s Arlington where you can enjoy your favorite baseball team or turn your sights toward a beach bungalow in the Keys. No matter where you land, make sure it’s affordable and that you have access to amenities that will be important as you age. Medical care, public transportation, and recreational activities are important considerations that will enhance your quality of life. If you’re not sure where on the map you belong, check out Forbes’ list of 25 places to retire for 2018.
Divide and conquer
As hard as it is to say goodbye to your belongings, when you downsize, you can’t take everything with you. If you’re planning on putting things in storage, you should reconsider. The chances of you ever actually using items that don’t fit into your new home are slim. Start in the kitchen where unused appliances and gadgets tend to dwell. These items, along with old clothes, too-large furniture, and books, DVDs, and magazines are perfect candidates for a garage sale.
If you have pets
More than half of all American households have a pet and the majority of these pets are dogs. Whether you’ve had your dog for a decade or have recently taken on a canine companion, you’ll need to make plans to keep him cool and calm during the move. The Dog People blog at Rover explains that it’s best to pack slowly over time and to leave at least one room intact where your dog can feel at home. During the actual move, put your dog in the care of a trusted pet sitter, or if he must remain with you, keep him by your side as much as possible to reassure him that everything will be OK.
Even if you’re physically fit, it’s probably not a good idea to try to tackle the physical aspects of the move yourself. Mayflower, a moving company founded in 1927, recommends finding a reputable labor service. Talk to friends and family and make sure to check the credentials of any company you consider. And since pricing estimates can vary wildly from company to company, make sure you’re comparing apples to apples and insist they provide a detailed quote.
What to keep
We’ve already mentioned a few things that you should get rid of, but there are just as many items and important documents that you should keep close at hand. Important papers such as your marriage license, pension plan information and insurance policies, along with wills, property deeds and military service records top the list. Family heirlooms, photographs and fine jewelry should likewise stay in the family whether you keep them for yourself or bequeath them to a child or grandchild.
Whether you’re moving to a more suitable space or just want to save money on frivolous living, downsizing your home is an excellent option to help you enjoy your golden years. Not only will you save time, money, and energy but also by selling your current house, you’ll reap the benefits of your equity. That’s money that can be put to good use ticking off items on your bucket list and living life to the fullest.
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The Home Equity Conversion Mortgage (HECM) for purchase is also known as a “HP4 reverse mortgage.” Read more here.
A HECM is similar to a home equity loan, except that the loan has very flexible payment options. Just make any payment you wish as the loan does NOT have to be repaid to the lender until the home is sold or passed on to heirs. If you want to pay the loan down, then pay any amount you want exceeding the interest and mortgage insurance premium. If you want to keep the balance from rising, pay the interest and mortgage insurance amount. The loan becomes due and payable if the borrower does not meet the loan obligations, including failure to occupy the property, maintain it, or pay taxes and insurance.
HP4 HECM features are:
•Homeowners retain full ownership of the property.
•There are no monthly mortgage payments.
•The HECM is a non-recourse loan, so borrowers will never owe more than the value of the home.
•The maximum claim amount is $636,150, or the appraised value, whichever is lower.
•The borrower chooses from multiple payment options including No Monthly Mortgage Payment. Taxes, HOA, and Insurance payments are required by borrower.
Richard Woodward, NMLS 217454
Your Local, Direct, 5 Star Rated Mortgage Lender, Specialty Lending Manager
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Service First Mortgage NMLS 166487
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Licensed by the Texas Department of Savings and Mortgage Lending (SML) Mortgage Banker Registration. Service First Mortgage is an Equal Housing Lender. This is not an offer of credit or commitment to lend. Loans are subject to buyer and property qualification. Rates and fees are subject to change without notice. The views expressed on this site are those of the individual author and do not necessarily reflect the positions, strategies or opinions of Service First Mortgage or its affiliates.