Buying a Home in Retirement

Mortgage lenders hold the job of qualifying potential borrowers for their mortgage based upon two factors: credit and income. This can often make it difficult for retired borrowers since they have no steady income, and as you’ve probably guessed, this can be a significant problem for aging parents who want San Diego senior housing.  Freddie Mac has recently brought forth a rule that will permit retirement assets to be utilized in the qualification for a mortgage loan, with a Freddie Mac spokesman recently said this regarding the new policy:

“Lenders can look at your IRA and 401(k) and lump-sum retirement account distributions as income, but there are some restrictions; in order for the money to be counted, you can’t be using these assets for current income, not even the dividends or interest from the investments.”  – Brad German

To take advantage of this option you need to be fully vested and have full access to the funds without risking penalty for early withdrawal. Before the introduction of the rule, lenders were unable to use retirement assets to qualify and individual for a mortgage which caused many complications for baby boomers, fortunately, this is no longer the case and Fannie Mae is currently following a similar rule.

Fannie Mae’s Take on the Rule

Fannie Mae’s take on the rule involves a formula that limits the lender to using 70 percent of the assets, and then makes them subtract the funds needed for the closing costs and the down payment. The remaining funds are divided by 360 months, and this is done regardless of the loan term.

Say for example that you have an individual who holds $1 million in retirement assets. They would be allowed, by Fannie Mae, to include $700,000 of those assets, subtracting $10,000 for closing costs. The individual in question would then be given $1917 per month as their income.

Stretching out Your Income

The effects of the recession are still impacting lives all over the United States, and there are still many who wonder whether their retirement savings are going to last. According to Gabrielle Redford, the Editorial Projects manager in Washington DC, the AARP has noted ten locations in which housing costs are lower than average.

“We worked with a demographer to estimate the budget for a typical retired couple with Social Security and some other assets and determined that if they spent about one-third of their income on housing costs they could buy a $125,000 home with a mortgage payment of about $500 per month, then we looked at property taxes, sales tax and cost of living expenses. We also checked crime rates and the availability and cost of health care.”

With the areas identified, livability was determined, taking into account the amenities surrounding the residences. For example, researchers looked at the arts and culture surrounding each spot, steeped in the knowledge that there was simply no point in moving to a location and paying a lower price if there is nothing to do there. People need interaction and they need things to do – it’s just a fact of life.

Mortgage Loans and Retirees

If the idea of moving into San Diego senior housing is appealing to you, then it is strongly recommended that you first sell your current home so that you can have some liquid cash on hand rather than the solid assets that you may have grown used to over the years. It is also recommended that retirees speak with investment advisors and tax experts along with an experienced lender to decide how much cash to spend and how much of the purchase to finance. It’s true that many people aren’t interested in having a mortgage in retirement, but if you need to stretch your assets, and if you need the tax deduction, it makes sense.

Lenders, for the most part, are going to need a two-year history of asset draws to determine whether the retirees have the discipline needed to adequately manage their money. Freddie Mac’s rules however do not allow you to use assets that you’re currently using as future income for the loan approval. It is strongly recommended, in light of this, that you use two accounts, with one completely untouched before a loan application. This will greatly increase your chances of being approved! It’s a long road, but it can be done, and it doesn’t have to be difficult by any means.

Call me or send me an email, I’ll be happy to help you sell your home when you are ready.

Gloria Roma

Call 726-999-0566

or Email Us

Retiring Baby Boomers:

Senior Living in San Diego

You’ve toiled 35 years in the workforce, and you can almost taste it: retirement is right around the corner, and you already have some great plans for your days that are about to be blown wide open – completely devoid of work schedules, PTO banks and late nights at the office. This is the case for most Baby Boomers in the area, who are ready and eager to move beyond their career days in favor of passing the rest of their time enjoying senior living in San Diego. However, as many come to find out all too quickly, retirement isn’t all it’s cracked up to be unless you’ve planned accordingly.

This, obviously, takes finances into account, but there’s much more to consider before you throw in your work towel and lounge by the pool for days on end. Millennials have done a fantastic job living life to the fullest, so don’t hesitate to look to them for some tips on how you can be happy and keep everyone around you happy in retirement.

Senior Living in San Diego – Plan, Plan, Plan

Unfortunately, it’s not quite as easy to stop working as one would think. Sure, the thought of a few months off is relatively easy to swallow for most, but ultimately you’ll be better off if you have a plan for your empty schedule. Why? Boredom is often the culprit for miserable days well into retirement years. If it’s not boredom, it’s conflict with your spouse who envisions your retirement years together in a completely different way. If it’s not conflict, it’s a lack of financial freedom, and if it’s not a lack of financial freedom, it’s loneliness. So… what are you planning for? What will senior living in San Diego bring to you? Take some time the years before you retire to proactively meet these issues before they take you by surprise when you hang up your work hat.

Plan to Communicate Before Retiring to San Diego Senior Housing

Communication with your spouse is key to ensuring a happy retirement for senior San Diego home owners. Some would even say that over-communication is a great practice when you’re approaching retirement. Why over-communicate, though? Chances are you’ve got life together down pat by now – you’ve braved the brazen years of your twenties, raised children together, encountered a few of life’s happiest and saddest moments together, and over the years you’ve slipped into a rather nice routine of work, life, and balance.

Retirement should be an easy slip into a blissful future together, right? If you think back, you might remember a time where life wasn’t so easy; you were still learning about each other, figuring out how to balance out each other’s interests in light of your own. Retirement can bring back this conflict fiercely if there’s a lack of communication. It’s important to bear in mind that with all of this new free time, you and your spouse are likely to have ideas on how to spend it, and they likely don’t agree completely. You want to lounge, she wants to travel; you want to golf with your buddies, and she wants to spend time with the family. Communicate up front about what you’d each like to do with your free time, and even if it feels like over-communicating, it’ll ensure that conflict isn’t a problem for you in retirement.

Baby Boomers Selling their Homes – Plan for Financial Freedom

Part one of planning for financial freedom for a senior living in San Diego, or even baby boomers selling their homes is not retiring too early! Collecting that social security check too soon is a surefire way to short yourself on income. Find out the age you’re allowed to retire fully – this will largely depend on the year you were born, and hold out if you can. Next, budget, budget, budget. Many go into their retirement years with no boundaries in terms of spending. Some hardworking Baby Boomers are susceptible to a feeling of entitlement when they retire, which gets many in trouble.

You did work hard all those years, and it would be nice to travel the globe, but can you afford it based on your budget? Don’t swipe the card and spend the money without working it all out first; that might work out at first, but make a devastating turn in the long run. Making a budget and sticking to it is a pivotal part of living wisely in retirement. In addition, though it may go against your grain to take a risk, don’t be so conservative in those investments. Take advantage of the resources that sit in front of you: apps, advisors, the Internet, and play the stock game in a way where there might be a greater return for an elevated risk.

On the subject of technology, don’t forget to have fun with it! There’s a lot to learn, and as you’re playing around, learning to use apps, you’re probably going to find that there are actually a few ways to make your life easier. Online banking, shopping, and a plethora of other tasks can be completed from the screen of your smartphone or from your home computer. The retired life is not only fun; it can be easy.

Plan to Be Independent for Senior San Diego Home Owners

Gone are the days of needing a heap of money and a financial advisor to make magic happen. The Internet is a wealth of information; apps are accessible and many are free… there’s no reason you should have to rely on someone else, like an advisor, to live retirement to the fullest. As it so happens, many baby boomers rely on others to advise them on things like money, technology and entertainment; it’s not that they can’t do it, it’s that sometimes the interest to learn new tools dies down when you already have so many tools in the tool belt. As a senior San Diego home owner with twenty to thirty years ahead of you, staying up to date on those resources will be freeing and empowering. Now’s the time to take advantage of those tools that will enrich your lifestyle as a senior living in San Diego tremendously!

Plan to Get a Job and Obtain the San Diego Senior Housing Lifestyle

Lastly, though you’re almost retired and your career is a thing of the past, don’t stop pursuing your dreams. Maybe now’s the time to start that business with your child that you’ve always talked about starting together; you have the time, so why not? Rest assured, no matter what your age, any instance of pursuing your passion – though sometimes risky – cannot be called a waste. Maybe you’re dream job is the one that you just retired from, and though you know that chapter is closed, you still crave a work culture. Just because you’re retired and someone living in San Diego senior housing doesn’t mean you can’t work; and just because you work doesn’t mean it has to be career focused.

Companies all over employ people part time and flexibly to keep everyone happy. So, maybe in working your budget, you find that a little extra spending money every month would be helpful. Maybe you’re toying with the idea of going back to work a year or two into retirement out of sheer boredom, but you’ve grown accustomed to the flexibility of life in retirement. Maybe you’re lonely and you miss that daily interaction with colleagues, coworkers, and clients. Just because you worked forty years as an attorney doesn’t mean you’re overqualified for a job with Uber, for example, or as a part time content producer for a local law firm. In fact, a job like that may be just the mental stimulation, challenge, or financial boost you need.

As a senior living in San Diego, when it comes right down to it, you have some challenges to overcome and a new life to adjust to. Today, seniors aren’t just living in their old houses, they’re either buying new homes or moving into retirement communities to bookend their lives with some brand-new memories. This is a new start for you; just make sure you not only get the home you want (if you plan to move), but that you follow the steps we mentioned above in order to keep your life together long into your retirement years.

Call me or send me an email, I’ll be happy to help you sell your home when you are ready.

Gloria Roma

Call 726-999-0566

Email Us

Helping Your Elderly Parents Plan for Downsizing

Many retirees decide that they need to downsize their property, and move to a new home. However, moving is never as easy as packing a few boxes when you’re older. You have a lifetime’s worth of possessions that need to be sorted through before you can go anywhere. If your elderly parents are struggling to pare down what they own, read on to find out how to help them get settled and even set up a trust.

A Lifetime of Belongings Surrounds your Elderly Parents

When you do a declutter of your house, you find it quite easy. There’s clothes you don’t wear any more, some CDs you have replaced digitally. Things aren’t as important to you, so you find it’s simple to keep your home free of too many things.

Your parents come from a different age. They may well see it as wasteful to throw things away or give them to others. There may be a broken radio in the attic, but they may need a part from it one day. Plus, the belongings they have tell the story of the life they have spent together. They’ve lived and raised children in the house they’re currently living in, they don’t want to lose it if they don’t have to. It’s much harder for them to declutter.

When your Parents May Decide to Downsize

Of course, even though it’s hard your parents may decide they need to downsize their home. There’s several reasons why they may do this.

• – One or both of your parents may suffer with ill health, and need more care than family are able to give. That’s when they may decide to move to a San Diego senior housing complex. There, they can get the care they need from the staff who work there, and they know they’ll be less of a worry to their family.

• – If one of your parents passes away, the remaining parent may decide that they need to move somewhere smaller as they’re now living alone.

• – They may decide to do this in advance of any future life events, as a result of estate planning. They can arrange their will and other legal affairs, and downsize knowing if anything happens, the hard work has already been done.

Who can Help in the Moving Process

When your parents decide to move, of course you want to help them out as much as you can. However, you have your own responsibilities, and may not be able to be there as much as you would like. If you live in different states, it’s even more difficult.

A lawyer will be able to help your parents with any legal preparations they need to make before they decide to move. They can have their will made or revised, name people to take care of their affairs if they are unable to, and so on. If they do this, their minds can be put at ease before the move. Estate planning is always a good idea when it comes to major life events like these.

Then, they can call on a specialist moving company to help them sort through all of their belongings, and move them. This is especially important as they’re moving to a smaller home, such as those in a San Diego senior housing estate.

These movers are specially trained to help your parents sort through the items they’ve collected throughout their lives, and find them ways to move them on. They can oversee the sales of any items that are listed, and can take away other items marked for donation. They can take a lot of the heavy lifting off your parents.

They’re also great for breaking down the uncluttering process. They will take your parents room by room through the house, and help then plan for what needs to go. It’s an emotional process, and they understand that. They’ll give them the space and time they need to get their belongings pared down to a manageable level.

Have Discussions Now and Plan Ahead

There’s a lot of families who find themselves trying to sort through a loved one’s home at the darkest of times, such as when that loved one has passed away. When this happens, it’s incredibly difficult to know what to keep and what to donate or sell. That’s why it’s so important and sit down with your parents now and ask what they want for the future.

Ask what they want done with their possessions. They may well be holding onto some for family, but in fact nowadays children don’t want to hold on to items that their parents handed down to them. Discuss this now so you’re clear.

Make these decisions now, and when the downsize happens, it will be much easier on everybody. Your parents will thank you for it.

In the midst of estate planning and generally sorting out your life, there is a good chance that you’ve come across independent living communities and generally have no idea what they are. Don’t worry, the same is true of a LOT of people these days. Let’s put it as simply as possible. An independent living community allows seniors to live on their own and remain independent while removing many of the obstacles that stood in their way in the first place. For example as a senior citizen you can expect to find several different environments such as a home, townhouse, condo, or even a mobile home if you so desire. There are several restrictions in such communities, offering San Diego senior housing, for example the age restriction stops those under the age of fifty-five from living there, but there are also several benefits. Most of these senior living communities bring club houses, yard maintenance, housekeeping, and even heightened security to make sure that everyone is safe in their homes. As elderly parents, after all this time, you deserve the peace of mind.

Should you Consider Independent Living?

Here’s the thing: you might be healthy right now you might be able to maintain your yard, and you might be able to make it to the store on your own, but you have to know that it isn’t going to last. Things are going to change quickly and while you might have no plans to move out right now, you should at least have a backup plan, just in case something does happen, and just in case you are forced to move out of your current home. Sure, you don’t want to do it, but it’s going to come, and you want to be ready.

So how do you go about choosing the right community? There are several factors that you need to take into account which include:

People – When you’re in the process of choosing an independent living community as an elderly parent you want to make sure that you can stand the people. Visit, talk to them, talk to the staff, see if they’re friendly. Do you share any of the same interests with the residents? Are they people you want to know better?

Community

As you’re looking at the community, you need to determine how far it is from your friends and family, how large it is, and how comfortable you would be staying there. Do you want a large community? Do you want a small one? Do you want a common area? It all depends on what you are comfortable with. Let’s face it, you’re in the twilight years of your life, and you deserve to live exactly where you want.

Distance to any grocery stores or pharmacies? Is there a gym in the community or one close by? Are there walking trails nearby? Parks? Medical Services?

Activities

What kinds of activities are available for you at the senior center? Is there a pool? Is there a game area? Are these things that you care about? This is definitely something for you to think about before you choose a senior center!

Finally, we urge you to consider the costs of moving in to a senior center. Is there a waiting list deposit? A move-in fee? Housekeeping? Cable television? Parking? Deposit? These are all questions that you will want to ask and you can be rest assured that there are several more for you to cover. The time is coming that you may need a senior center – make sure you’re ready.