Buying a house is a major financial decision. And for older homebuyers, the decision to purchase a new home comes with extra significance. While you’re never too old to buy a house, age can play a significant role in determining if the purchase is the best move for your finances.
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From mortgage eligibility to long-term financial planning, the decision to purchase property in your 50s, 60s, or beyond depends on your unique circumstances. GOBankingRates reached out to the experts for their insights on whether you’re ever too old to buy a house, and what factors middle-aged and senior homebuyers should consider before making this major investment.
Older Buyers Should Take the Time To Think Things Through
Personal finance expert Suze Orman doesn’t think age should preclude a buyer from making a home purchase, but she does recommend taking the time to think about it carefully. Buying a home at any age only makes sense if you can afford it financially.
In Orman’s opinion, being able to afford a home purchase means the ability to put down at least 20% while holding onto a robust emergency fund. She also suggests not dipping too far into your retirement nest egg to cover the costs and choosing a 15-year fixed-rate mortgage.
Future Needs Become Especially Important
If buying a home later in life, it must meet your current and future living needs. Of course, this applies to the financial principles of not spending down too much of your retirement savings to make this purchase. But it also applies to the physical realities of aging.
“Retirees often come down to Florida dreaming of palm trees and a golf cart lifestyle, but they sometimes jump into a purchase without thinking a few years ahead,” said Jessica Robinson, co-owner of Family Nest North Central Florida, a company that helps families navigate transition periods, like aging.
“I once had a sweet couple buy a two-story home in a gorgeous 55+ community, but after a year, those stairs became a daily hassle and they ended up selling,” she continued. “That’s why I always tell my clients to try and think five to 10 years out when they’re buying a house.”
Before moving forward with a home purchase, make sure it is likely to fit your future needs.
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Keep Maintenance in Mind
Homeowners of all ages have to deal with home maintenance tasks. Although most basic home maintenance tasks can be hired out to professionals, bringing in help increases your total homeownership costs. When shopping for a home as an older buyer, consider the required maintenance and what you might need to outsource.
“A large home with a large yard will tend to require more maintenance than a small condo,” said Melanie Musson, an insurance expert with Clearsurance.com. “So, when you’re older, you might want to think about where you’d like to settle and live when you’re less able-bodied.”
Opportunity To Downsize Housing Costs
As you transition to a new stage of life, you might take the opportunity to downsize or even relocate to an entirely new destination.
For many older Americans, their home equity represents a significant source of wealth. Although you can tap into this equity through loans or refinances, selling your current home and purchasing a more affordable one in cash could give your retirement nest egg the boost it needs.
As you assess your financial situation, making a move could help alleviate your housing costs if you have significant home equity and don’t mind finding a more affordable place to call home.
Final Take To GO: Age Isn’t the Main Number To Consider
Your age alone isn’t a reason to skip a home purchase. But when evaluating a home purchase later in life, it’s especially critical to consider your financial situation. If you do decide to purchase a home, make sure to protect your nest egg from depletion.
Caitlyn Moorhead contributed to the reporting for this article.
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This article originally appeared on GOBankingRates.com: How Old Is Too Old To Buy a House?
