Making the move from a homeowner to a retired homeowner entails more than one might expect. Typically, retired homeowners have less money to spend both on mortgage payments and on other activities. Here are some helpful tips for Pennsylvania retired homeowners…
1. Income is still important. Once you’re retired, lenders will most likely use retirement income, including a pension or monthly Social Security stipend, to see if you qualify for a home mortgage. They view and treat your loan application in the same way that they treat the applications of non-retired borrowers. The lender will check your credit, look at your most recent tax returns, view statements from all your checking and saving accounts, and they will ask to see your Social Security and pension or other retirement system award letters.
2. Sell first or buy first? This is a question that concerns buyers at all stages of their homeownership. Choosing to sell first leaves you with the challenge of finding a temporary place to live while you wait to find or close on your new house. The benefit to selling first is that you know exactly how much money you have (from the sale of your home) to spend on your next home. In choosing to buy first, you may face financial stress if your home doesn’t sell as quickly as you thought it would or for as much as you expected it to. In short, you could end up having to make two house payments at the same time until you sell your current home. The benefit to buying first is that you won’t be pressed to find a temporary home while you search for your next one.
3. Do some research. By talking to a trusted mortgage broker, you can learn more about all of your options, including whether you can qualify for a new mortgage without selling. For example, in many states, if (1) you’re buying to downsize, (2) you’re moving to a less expensive area, (3) you have a large amount in savings or (4) the homes you’re looking at are modestly priced (for your income/SSI), you might not need to sell your existing home before you qualify to buy the next one.
4. Get creative. As a retired homeowner in Pennsylvania, you have many options you may not have even considered. For instance, you may want to consider the possibility of selling your home, then spending some time traveling while you continue your house hunt. You could also look into the possibility of selling your home and then leasing it back from the buyer. To get a more detailed list of the many options available to you as a retired homeowner, talk to a local real estate agent.
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