Homebuyers' Walkthrough: Homes For Retirement
While many homeowners remain in a home for decades and throughout retirement, others may wish to pursue a home that is specific to retirement. Often, a desired location is the driving force behind purchasing the ideal home for retirement. Many people, for example, dream of retiring at the beach or next to a cool mountain lake.
When finding a home for retirement, buyers should make the same considerations as for a "regular" home, but with retirement plans in mind. Will children and grandchildren visit? What activities does the retiree plan on pursuing? Is there close and adequate healthcare? Asking these types of questions can help buyers find the perfect place to call home during retirement.
Condominiums are very popular among retirees, including those who are looking to downsize from their previous homes. A condominium community may offer many opportunities to socialize, and certain developments offer services that cater specifically to retirees and seniors. In addition, many retirees enjoy traveling and the reduced maintenance associated with living in a condominium.
Financing a condominium may be more difficult than other types of properties. As with any mortgage, a condominium buyer must first qualify for the loan. In addition to having excellent credit and a steady source of income, certain borrowers may be required to make up to a 25% down payment, depending on the type of the loan.
What makes condo loans so challenging is that, unlike other mortgages, the condo association also has to qualify in order for the mortgage to be approved. The borrower has little to no control over this aspect of the lending process. Lenders follow new guidelines from the Federal Housing Administration (FHA), Fannie Mae and Freddie Mac. Fannie Mae requirements stipulate that:
- More than 50% of the condominium units must be owner-occupied
- No single investor can own more than 10% of the units
- No more than 15% of owners can be delinquent on monthly dues
- All planned amenities must be finished if the development is more than one year old
- Borrowers who make a down payment that is less than 25% will pay either an extra 0.75% of the loan amount at closing, or an interest rate that is approximately 0.25% higher
A vacation home can be repurposed during retirement years and become the owner's primary residence. People who enjoy vacationing in a particular area may dream of living there during retirement. While it is impossible to predict future home values, some buyers may wish to purchase a vacation home now to lock in a retirement home (at current prices) for later. In addition to looking forward to using the property a primary residence in the future, it can provide years of vacation enjoyment.
People who enjoy international travel can think globally when choosing a location for retirement. The beautiful settings, low costs of living and low property taxes are attractive to many home buyers. Some of the world's most affordable housing markets are not in the United States, but are still relatively close to home. A couple who has enjoyed spending time in Central America, for example, may wish to explore the region's many real estate opportunities. Certain popular international destinations attract entire communities of expatriates.
International destinations offer a variety of benefits to home buyers, but these purchases may require extra planning and attention to details. Depending on the country, there may be rules and regulations regarding who can own a property and how the property can be used. It is important to consult with a qualified real estate professional and attorney to determine if a purchase is both feasible and practical, and to ensure the buyer understands his or her rights.
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