9 things you should consider when buying a home in your 40s
Home, a four-letter word that can’t describe the amazing feeling of just being there. A space that is ours from the inside-out, a safe-haven to run to when needed. Doesn’t it sound great to just have one until the end of our days? No matter how nice it sounds, that is not a choice many can afford or decide on lightly, especially if you are buying a home in your 40s.
According to The National Association of Realtors, 59% of home buyers under the age of 29 don’t expect to be in their home for more than 10 years; 28% of them plan on being in their new home less than five years. These numbers prove that young people might buy one or two houses in their lifetime. People in their 40s that never got to own the place where they live don’t have such a chance, having only one opportunity of buying the home they have come to dream about. Here’s a list of some important factors you should consider when buying a home after your late 40s:
1. Set a realistic budget considering your needs and stick with it
The biggest financial investment most people do in their lifetime is buying a home and each one is different and was designed to fulfill different needs.
When determining your budget think not only of the now but make sure you’re thinking about everyone’s future. Don’t forget that in a few years your income will most likely decline and the mortgage is not the only thing you will have to pay.
We advise you to think about your particular needs, select and rank features you might want but aren’t a necessity. When it’s time to choose between properties, this rank will help you separate what’s wanted from what’s needed. However, you should not go over your budget no matter how amazing the property looks.
2. Can you afford it?
Look at your finances and use SoFi home affordability calculator, could you possibly buy a house with your own money without a loan? We highly doubt it because buying a property is expensive.
You will most likely need a loan to afford the house you want. You’ll pay mortgage and taxes based on the amount you got loaned to you, the term and the taxes. Also, contemplate the required down payment, usually, you are asked to pay 20% of the total price.
Term
The term is how long it will take you to pay back your loan according to the repayment schedule. For example, a loan of $30 million can take 30 years if you pay $1 million annually.
Taxes
Taxes can either be fixed or adjustable. A fixed tax rate means the interest will not change regardless of the changes in the industry. An adjustable tax rate will change as the industry grows or declines. This tax rate is a great opportunity to save money if the industry declines but a risk considering the industry can grow anytime.
Considering this, we advise you not only check your finances but also your life stability. Think about how many years are left until you retire, yours and your partner’s health, will you have some money on the side to afford any kind of unpredictable circumstances and any other situation that might later impose changes in your life. Schedule a free consultation with a tax expert to discuss your specific situation.
3. Location
When considering buying a home, one of the first things you must decide on is its location, especially if it’s a life-long investment. Take into account the distance between the property and places you frequent the most, like workplaces and grocery shops; family and friends you visit regularly and it’s accessibility to public transportation. If you have small children or grandchildren, you should also consider schools and the kind of neighborhood you might be moving into. Don’t just google it, go for a walk or a drive and check for yourself the area you might be moving into.
Keep in mind that the heart of the city tends to be more expensive than the areas around it. That’s why people tend to strike a balance in order to get the lifestyle they’re looking for at a reasonable price. The nice suburbs of Austin TX are a great example of this, blending urban convenience and culture with cost-effectiveness.
4. A brand new home or a fix-me-up?
Would you prefer a house with little to no changes needed, or would you prefer to pick a less expensive property that requires construction work and upgrades? Everyone has different needs therefore each property will fit different people.
The latter option requires more time and a different mindset that is not for all people. One of its perks is the availability of creating and designing the property as you see fit. If you choose this option make sure you take note of the fact that the construction needed and renovations will cost you money. The value needed might cost you more than you initially planned.
5. Does it fit your lifestyle?
Does the property match your lifestyle or the one you are planning to have later in life? After retirement, will you stay at home or will you travel? It might seem a distant thing now, but buying later in life means that there is less room for mistakes and you shouldn’t restrict your options.
Consider the size of the rooms, kitchen, bathrooms and their layout while thinking about the years that are to come and changes in your body and mobility.
If a property won’t fit your lifestyle, it’s better to not make such a big investment and lifechanging decision.
6. Look for more than paint
When visiting a property you might be buying, don’t focus on cosmetic details that are relatively easy to change. Instead, see and take note of the big things you’ll need to change, notice the cabinets, appliances like washer, dryer, water heater, fireplaces, air conditioner and so on, inquiring the seller about their conditions if they have been maintained properly through the years.
Some sellers add appliances to the property to make it look nicer to possible buyers only to later take them out. We advise you to check with your agent if the price of the property includes said appliances.
7. Buying a property is a contract like any other
Contracts tend to be commonly associated with employment and tenancy related subjects however, the buyer and seller are signing a contract when buying and selling the property. Just like any contract, buying a property is also negotiable.
Nevertheless, the amount of negotiability will depend greatly on the seller. Some sellers will not sell the property for less than announced and would rather wait for a buyer that would buy the property for its original price. On the other hand, some sellers want to sell their property as fast as possible even if it means selling for a lower price.
According to the theclose, 35% of residential properties sold for between 95% and 99% of their initial price in the year of 2018. Take your chance and discuss your options with your real estate agent, place your offer and wait.
8. Get a trustworthy real estate agent
It might get difficult to navigate the real estate industry by yourself therefore we recommend you get an agent you can trust and depend on. According to theclose, 71% of real estate agents specialize in residential real estate, we suggest you look for one of these professionals.
Some home hunters might consider an agent a waste of money and completely unnecessary. What they don’t realize is that the seller is the one that pays the commission received by agents. Their knowledge will make the process much easier and less stressful for you.
9. Ask for a floor plan
Floor plans tend to be a little overlooked yet they are something useful and full of information to help you choose which property to buy. A floor plan is a drawing to scale, showing a view from above, of the relationships between rooms, spaces, traffic patterns, and other physical features at one level of a structure. This is important as it shows real dimensions and the harmony between the rooms and halls. Floor plans stop you from having to visit a property that looked great in photos but doesn’t match your needs.
Overall, buying a home is not an easy decision for anyone to make. Middle-aged people must consider every aspect of their lives when deciding if it’s for them or not. Think if you want this property to be your home for many years of it’ll be something temporary. Owned or rented, a home is where you feel comfortable, so think carefully about it. Think about the present and the future weighing all the factors that are important to you before making a final decision.
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