By Samuel Gonzalez
13 Jul 2024, 15:21 PM EDT
It seems like the goal of life is to buy a house and have a comfortable retirement. Sometimes we don’t achieve either of those. Or if you have acquired assets, We will give you some reasons why you should not sell it, especially during your retirement..
According to a recent report by Clever Real Estate, 10% of retirees surveyed said they were considering selling their home during retirement as a way to save money and cover retirement costs. Whether you want to move to a paradise or simply downsize your home, think twice before you start the selling process.
1. You have a low interest rate
Look, just because you own a home doesn’t mean you own it entirely. Many retirees continue to make housing payments, which is only natural. The problem with trying to sell is that you could be making a costly financial mistake. If you have locked in a low rate, between 2% and 3%, that is a great blessing; the bad thing is when you want to sell to buy somewhere else..Current mortgage rates have even reached 8%. That means a few hundred thousand extra dollars.
2. Current mortgage rates are high
As of June 27, 2024, the Federal Reserve Bank of St. Louis indicated that The current average 30-year fixed mortgage rate in the U.S. was 6.86%While it is not as high as when rates peaked after the pandemic, it is still a very high interest rate that will translate into a higher monthly payment than normal. As stated in point one, the combination of having a low rate with current mortgage rates is not a fortunate one if you want to sell to buy.
3. You have not paid enough value for your house
We said it at the beginning, selling does not mean that you have finished paying off your house. If you maintain an active mortgage, Check how much percentage of the house you have already paid and what corresponds to youThis is important because even though a house you haven’t finished paying off yet is worth $1 million, you may have only paid $200,000 and even with the sale you may not have enough money to buy another property.
As a general rule, It is better to have around 10% equity in your home if you are selling it to move and at least 15% if you want to improve your house and buy a bigger one.
Like is logic, If you have already finished paying for the house, this point is irrelevant to you.. However, there are other considerations you should keep in mind when making the decision.
4. There is a housing shortage
Even though many governments have pushed for initiatives to develop the housing market in the region, inventory remains limited. Such a tight real estate market is beneficial for sellers, that’s true; however, If your plan is to sell to immediately become a buyer, you could face prices above your budget.This same factor is what has caused mortgage rates to rise. You may want to stay in your home.
5. You are attached to your first home
It’s not all about money. As we said, the American dream becomes a reality when you buy your own home. It’s only natural that you have many memories and affection for that house. Perhaps the emotional part can be the anchor that allows you to protect your finances.. Recap the reasons why you bought that house and not another, perhaps it will reinforce why you should stay in that place to live your golden years.
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