Aging and housing choices will be (often) complex topics of conversation as families discuss their future needs.
Whether it be empty nesters, ADUs, or first-timers needing “a little family help” (co-borrowers/gift $$), the end-of-year holidays spark these conversations.
Inman: Each Age Group’s Home-Buying Mistakes
No matter their age or life stage, many buyers make mistakes when buying a home, whether picking the wrong location or buying more houses than they can afford.
Every age group is susceptible to particular mis-steps. Here are common mistakes homeowners make at each age and a few ways to avoid them.
1st Time Home / Millennial Buyers
People in their 20s -40s are just starting their careers and usually have less money saved than older home buyers.
Paying less for a mortgage is just a priority.
Many choose an adjustable-rate mortgage (ARM), thinking they will earn more later. If that doesn’t happen, and interest rates go up in five to seven years, they’ll see mortgage rates rise substantially.
1st Time Buyer Programs
Along with popular programs like FHA loans and VA loans, there are other lesser-known initiatives geared to homebuyers on a fixed income.
The HUD-sponsored Good Neighbor offers home-buying assistance for law enforcement officers, firefighters, emergency medical technicians, and pre-kindergarten through 12th-grade teachers.
Along with federal money, there are state-sponsored grants for first-time homebuyers (CalHAFA).
Another mistake younger homebuyers make is not considering a future family; while buying the “singles crib” is alluring, it will cost them money later.
If you plan on having a family, it’s essential to consider that when you’re home shopping, even if you’re currently single.
These are questions younger buyers should ask before buying a home:
– Do I want to get married? Raise a family or travel?
– Where do I imagine living? – How do I imagine living?
40s-50s: Overestimating Their Budget
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Buyers in their 40s and 50s tend to have more money, which may lead to overestimating their budget.
These homebuyers make the mistake of spending at their limit, which leads them to make hard choices and sacrifices later.
Just because buyers can afford a $800K home doesn’t mean they should buy one. One way to avoid this is to figure out a lifestyle comfort level and decide the future in their senior years.
For example, Do they keep the country club membership or cancel and travel around in a motor home?
60s and Up Falling in Love with a Vacation Home
Many homeowners in their 60s are retired or getting ready to retire, but relocating and buying a home is expensive, so retirees should be sure they familiarize themselves with a new place before buying.
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While some choose to stay where they are, many plan to move to warmer climates or another country.
Too many retirees make the costly mistake of going on vacation, falling in love with a place, and moving immediately.
They think, ‘Oh my god, this is great.’ Then, they go home and sell their homes directly.
“They get there and hate it!!!!! But only after they sell their homes, pay cap gains, and incur expenses they can’t afford in their senior years.
