Zure etxea saldu eta jubilatuen etxea erostea al duzu? Hona hemen 3 aukera

SmartAsset: Aiming to Sell Your House and Buy a Retirement Home? Here are 3 Options

SmartAsset: Aiming to Sell Your House and Buy a Retirement Home? Here are 3 Options

Housing wealth is a major financial asset for homeowners heading into retirement, but if you’re planning to cash in by selling a larger home to downsize in retirement you may need to think again. Rising interest rates and declining home values amid a still-tight housing market mean you may get less than expected for your current property but still pay significantly more for your retirement home. Consider working with finantza aholkulari bat as you plan your transition into retirement.

Rising Mortgage Rates Weighing on Home Prices

Orain dela Erreserba Federalaren has hiked interest rates, 30-year hipotekak averaged 6.29% at the end of September, an increase of 118% from the September 2021 rate of 2.88%; they’ve since shot up to 6.7%. That increase is beginning to push home prices down.According to data and analytics firm Black Knight Inc., the median home price fell 0.77% between June and July – the largest single-month drop since January 2011. While values remain higher than a year ago, Black Knight found values dropping in more than 85% of the 50 largest U.S. markets, with more than one in 10 seeing prices fall by 4% or more.

The lower values leave current homeowners with less available equity – the amount a homeowner can borrow against while keeping a 20% equity stake they can tap for a new home. While homeowners had accumulated a record $11.5 trillion in available home equity in May, available equity slipped down by 5% in the last two months, and the third quarter could bring the first quarterly decline in available equity since 2019.

That leaves retiring homeowners in a bind: They have less equity to put into a new home, but home prices are still much higher than when they purchased their current home – up 14% in the past 12 months. Plus rising interest rates have pushed monthly mortgage payments higher.

One Example, Three Options

SmartAsset: Aiming to Sell Your House and Buy a Retirement Home? Here are 3 Options

SmartAsset: Aiming to Sell Your House and Buy a Retirement Home? Here are 3 Options

Consider a homeowner who in September 2021 nets $200,000 of equity and borrows $100,000 at 2.88% to purchase a $300,000 retirement home. The monthly principal eta interesa payment will be $415. Now consider the same move a year later, in September 2022. The homeowner nets $190,000 from the sale of the current home. But the retirement home that cost $300,000 in September 2011 now costs $342,000. So the retiree has to borrow $152,000 ($190,000 + $152,000 = $342,000) at 6.26% to afford the retirement home. The monthly principal and interest payment will be $937, more than double what would have been due in September 2021.

Existing homeowners have a disincentive to sell because every dollar borrowed costs more. They should carefully consider their options.

  • Simply not selling at all and just waiting to see if an eventual drop in inflation lowers interest rates to make moving more affordable.

  • Home buyers may be well advised to consider locking in a mortgage rate now to avoid higher rates as Fed hikes continue.

  • A third approach is to purchase now with plans to refinance to a lower mortgage rate in the future. One way to do that is with an adjustable rate mortgage (ARM), where the rate is locked in against a rise for the first years of the loan and then adjusts every year after that. Some ARMs allow borrowers to convert to a fixed-rate loan later. During the third week of September, for example, the average rate on a five-year ARM was 4.97% compared with 5.44% for a 15-year fixed loan and 6.29% for a 30-year fixed mortgage.

Beheko lerroa

Rising mortgage interest rates combined with home prices that are easing but still above recent levels can leave retirees or aspiring retirees facing a conundrum. Possible responses might be to just wait the market out, get an ARM or go ahead and buy that retirement home so you can lock in a fixed interest rate before the Fed raises rates even more.

Tips on Buying and Selling Residences

  • How to thread the proverbial needle between rising rates and still high home prices can be a challenge. That’s where the insight and guidance of a financial advisor can be valuable. Finding a financial advisor doesn’t have to be hard. SmartAsset-en doako tresna zure eremuan zerbitzatzen duten hiru finantza-aholkularirekin parekatzen zaitu, eta zure aholkularien partidak elkarrizketa ditzakezu kosturik gabe zuretzako egokia den erabakitzeko. Zure finantza-helburuak lortzen lagunduko dizun aholkulari bat aurkitzeko prest bazaude, hasi orain.

  • Erabili gure no-cost calculator to get an estimate of how much house you can afford.

Photo credit: ©iStock.com/shapecharge, ©iStock.com/xavierarnau, ©iStock.com/Fly View Productions

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Source: https://finance.yahoo.com/news/aiming-sell-house-buy-retirement-140852896.html