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Tuesday, August 31, 2010

The Best Use of your Equity is a House within your Means


These thoughts are directed to those 55 and over! Being on the business side of age 50 myself, it is hard to imagine anyone really wanting to be paying down a big mortgage when they retire. We expect that our disposable income will take an adjustment from our working years. While our expenses may be reduced without the costs associated with getting to and from and working a job, we will want to maintain our lifestyle and living standards. Hey it is our time to do the things we have always wanted to do!

Typically, a house and perhaps our retirement plan are our biggest assets. How do we best use the equity from our home to supplement our retirement income? Many people consider a move to a more accommodating home at this stage of life. If the home is too big, has too many rooms, has too many stairs or we are just tired of caring for a large yard, some other housing option begins to look better and better. Maybe we just want to move to a different climate or nearer our children. In either case, ideally we have paid down most or our entire mortgage so that we actually own our home rather than the bank still owning it.

The equity we have created or saved over the years in our home becomes a tool and a resource that allows us to make a move. With enough equity, we can buy a more manageable place in terms of size and upkeep as well as being more manageable financially. This is not always easy to do especially with the cost of new homes.

An apartment may offer a lower monthly expense, but paying for one will result in a loss of our equity for each month we rent. A condo may offer a lower level of investment, but most of the lower price condos are townhomes that are not suited toward 55 and over buyers (if the living areas and master bedroom are up a flight or two of stairs).

An investment in a modestly priced manufactured home can be the answer by offering you the ranch style home that puts everything on one floor and the home within financial reach. You can decide how much to reinvest in your new home or to keep in savings for other purposes. Buying too much home will just move your equity from one home to another and perhaps get you back to paying a mortgage. At today’s interest rates a mortgage may make sense for some but not if the expenditure keeps our finances to tight to enjoy what we really want to do at the 55 and over stage of life. By best using our home’s equity or other savings we can own within a manageable monthly expense.

Seriously consider your options and how to most effectively use your equity “nest egg”. The Jensen Team is available to help you “Get in on the Good Life!” and explore the possibilities.

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