If you’ve started to feel like you’re making noise in your home, there could be benefits to downsizing your property, including the fact that tending to a large house can become a burden. If this sounds familiar, then downsizing might be the right option. But the process of moving to a smaller home — or taking equity out of your home — isn’t as simple as it once was. There are important considerations for those looking to downsize or borrow later in life and it is worth seeking expert advice before making any major mortgage-related decisions.
WORKFORCE REDUCTION: Moving can be an emotional rollercoaster, especially if you’ve lived in a house for a long time and have many happy memories there. However, downsizing has several benefits, such as freeing up equity, allowing you to live more comfortably within your means while simultaneously increasing your finances. Potentially, you could sell your home and use the equity to purchase your new home. There might even be money left over to put into a savings account or set aside for your children’s inheritance.
The possibilities are endless, but unfortunately the process is more complex than it seems, so it’s important to agree before finding your next home. Gone are the days of making an offer on your new home before putting your own home up for sale. Instead, when you find a property that’s right for you, you need to make sure you’re able to keep going, especially when the market is as buoyant as it is today.
However, it’s not uncommon for homeowners to feel nervous about putting their home on the market, so it’s important to remember that when you’re selling a property, you’re in control and putting your home up for sale. in no way makes you homeless. If downsizing is on your agenda, it may also be worth booking an agent valuation, primarily to understand your financial situation. If you’d rather not list your home until you find another place to live, it might be time to think outside the box. You might consider short-term financing options or using some of your savings if that’s an option available to you.
LOAN AT RETIREMENT: Borrowing later in life is a game-changer for some homeowners and there are a number of reputable and well-known lenders who will allow customers to borrow money up to age 95, subject to reservations , including pensionable income or sufficient net worth in the property. Offers like this are usually available from building societies, where decisions are made by a member of staff, applying common sense, unlike larger lenders who may automate these decisions.
Your situation may mean that you have wanted to take money out of your property to help your children or buy a vacation home, but if you still have a good income and can afford the payments, your mortgage options are probably still strong. There is a strong market for buyers to extend their borrowing period into retirement with the added option of capital release solutions.
Seek expert advice when making or extending major financial commitments so you can make informed decisions and protect your finances for the future. Andrew Milnes, Business Principal at Mortgage Advice Bureau, Bingley, Tel. : 01274 568832
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