You’ve waited for the day you could finally be “free” from work and now that it’s here you are thinking of selling your home but have no clue how to do that on your SSI. Keep in mind while going through these 4 tips below for retirees, some decide to have get a part-time job to fill some time and supplement income.
1. Income is as income does.
- Most lenders will use retirement income, including a pension or monthly Social Security stipend, to qualify a borrower for a home mortgage.They view it and treat it just like they treat salary or wages — and they require you to document it in a similar way. The lender will want to run your credit; see your most recent tax returns, as well as statements from all your accounts and see your Social Security and pension or other retirement system award letters.
2. You might need to sell, then buy — or not.
- The fact is, there are challenges and benefits either way you go, whether you decide to sell first or buy first. Obviously, if you sell first, you have the challenge of finding a place to live while you house hunt. On the flip side, you have the security of knowing exactly what your proceeds of the sale will be before buying, which might help you buy well within your means.
- If you decide to buy first, you’ll face the possible stressors involved if your home takes a long time to sell or sells for less than you expected, not to mention the challenges of a mortgage payment you’re not used to and the financial burden of maintaining and paying property taxes on two homes at once.
3. Get briefed on all your options.
- Ask your friends and relatives if they have a mortgage broker they trust implicitly, and set an appointment to get the pro’s input on your next steps. The mortgage broker can run all the numbers involved and tell you what you should be able to qualify for, dollar-amount-wise, before and after you do get your home sold.
- The mortgage broker will also give you all of your options, including whether you can qualify for a new mortgage without selling. For instance, if (1) you’re buying to downsize, (2) moving to a less expensive area, (3) you have a hefty savings or asset portfolio or (4) the homes you’re targeting are modestly priced vis-à-vis your income, you might not need to sell your existing home before you qualify to buy the next one.
4. Get creative.
- Sell your home, then rent a chic loft or a writer’s cabin somewhere, or travel for a year, while you house hunt.
- Talk with a local agent about the possibility of selling your home, then leasing it back from the buyer. E
- Explore the prospect of relatively short-term financing for your new home, which might offer a lower interest rate and monthly payment than a long-term loan, and which might make sense if it’s truly realistic that you’ll pay it off in the near future when you do get your home sold.
- Work with a local real estate agent who has a recent track record of success at selling homes in your area, and bring your tax, financial planning and estate planning advisers into the conversation as you try to understand and explore the full spectrum of available options. If you have such a team in place, take maximum advantage of their thoughts and experience as you put your personal action plan in place.
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