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3 Things Seniors Should Avoid When Downsizing

Mary Ellen Vanaken

Mary Ellen was born and raised in Long Island, New York. After graduating from college, she worked on Wall Street for JP Morgan in New York City...

Mary Ellen was born and raised in Long Island, New York. After graduating from college, she worked on Wall Street for JP Morgan in New York City...

Apr 9 5 minutes read

For many seniors, downsizing can be a great move after retirement, benefiting you in more ways than one. The financial benefits are particularly compelling, especially to seniors facing the prospect of living on a fixed income. By downsizing to a smaller home, you effectively lower expenses like utilities, maintenance, and taxes. This can mean redirecting cash flow toward the things that matter, such as care, assistance, and better accessibility at home.

 

Despite the perks and seeming ease of downsizing, the process is often not as cut and dried as it seems at first glance. Realtor Mary Ellen Vanaken wants you to recognize the possible mistakes that can go with downsizing so you can ensure a smooth and happy outcome.

 

Assuming that you have no credit options.

In a perfect world, seniors would be financially solvent—that is, free from debt, with good credit, and have plenty tucked away in savings and investments to never have to worry about money for the rest of their lives. This is often not the case, though. In fact, U.S. News points out there’s a reported increase in credit card debt (among other debt) in seniors. 

 

Because of this, some seniors end up shelving their downsizing plans, with the belief that they are unable to get a home loan at this point in their lives. This is a huge mistake. If you find yourself in this situation, you may be pleasantly surprised to know that despite having bad credit, there are several viable options to get a mortgage with bad credit. 

 

Do your due diligence and get to know these options. For one thing, you can look into the FHA’s bad credit loan program. For another, veterans can opt for VA loans to get help in down payments—the list could go on and on.

 

Underestimating the cost of a new home or senior living facility.

In that same vein, know that biting off more than you could chew is a legitimate pitfall of downsizing. With moving to a smaller home in mind, it can be easy to assume that you’re looking at smaller prices and lesser amortizations, too. However, once again, this is largely dependent on the current housing market, which drives home the importance of doing your research before buying a new home.

 

Alternatively, you can also consider an all-encompassing housing option like a nursing home. For seniors with specific and more demanding health and care needs, this could even be the best downsizing option as it ensures that you’ll receive round-the-clock living and medical assistance as well as access to a range of amenities. 

 

Of course, not all nursing homes are created equal, so it’s a good idea to get to know your options in Atlanta by reading reviews and visiting several communities. Moreover, the cost is also something to consider, so make sure you find out the pricing before scheduling tours.

 

Overestimating your current home’s worth.

For most, downsizing entails selling one’s current home, ideally at a profit, to fund the transition toward a smaller, senior-accessible dwelling. For some, however, it’s rarely as straightforward as this. CNN notes the housing market is currently in shambles, so there will be risks involved in selling.

 

It goes without saying that really getting to know the housing market in your area is crucial before selling. More than just getting to know current trends, you also have to take into account factors like timing and more. Most importantly, you need to be realistic about the likely value of your home, as well as wait until you’ve sold it before buying a new one. 

 

Indeed, downsizing is a big life move and should never be taken lightly. So give yourself the tools to make the right decisions by researching your options and anticipating possible mistakes before you make them. Set yourself up for success, and your golden years will surely shine!

 

Need help finding the perfect home for your needs? Contact Mary Ellen Vanaken for expert advice and assistance—(678) 665-2887.

Article via Natalie Jones. Photo via Beach Pretty. 

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