Financing your home after Retirement
Financing your Home After Retirement
One of the critical aspects related to retirement planning concerns buying a new home. The real estate melt-down in the US has led to a sharp decline in the price of property in the country. US retirees are bound to find it easier to purchase a home that meets their budget specifications. Thorough research, study and analysis are required for buying a home for post retirement needs. At FutureYears, we provide you information about financing your home after retirement.
You need to decide how much you are willing to spend for your new home. Everything else can come later. You will have to take into account the expenses that are likely to be incurred after retirement. Ideally, the budget allocation for your new home should leave you with enough money to meet other needs. Retirees have to be careful about not going through their nest egg too soon. A bit of planning will help you reduce the adverse effect that financing your home causes on your savings stash.
If your savings stash seems unable to cope with your needs of financing your home after retirement, you could always take out a mortgage. Mortgages are quite popular with the US retirees and baby boomers. Taking out a mortgage from a bank usually comes with its own set of hassles and challenges. During your quest for a mortgage in the US, you are likely to come across the following financial terms:
- Credit worthiness
A bank is likely to make inquiries regarding the income of a mortgage loan applicant. The financial details of the loan applicant are studied to understand the capacity of the individual to make timely repayments. You might be required to furnish information about existing debts, college loans and credit card charges.
What you own is likely to interest a bank offering mortgage loans. Ownership of assets like stocks, mutual funds, real estate, car and other personal property, are taken into consideration when deciding upon the mortgage amount to be loaned out. All these factors are studied to determine your present and future capability to repay the borrowed money.
Your credit worthiness or your credit rating is another area of concern for your mortgage bank. A favorable credit report from agencies like Experian, Equifax and Trans Union will help you earn brownie points with your bank. The credit report usually carries information about personal financial history. It would show your track record of paying off bills on time.
You may not have to worry about collaterals for your mortgage. The house that you purchase using your mortgage loan is generally taken as the collateral. In the worst case scenario, you might have to give up possession of your house to the bank. You could avoid that if you are diligent with your repayments.