Guide to Home Ownership during Your Retirement

Many of us work hard all our lives in anticipation of a relaxed and enjoyable retirement. While pensions are a good way to ensure you continue to have income in your retirement, a big chunk of your capital is likely to be tied up in your home.

Most homeowners will have paid off or be about to pay off their mortgages when they reach retirement. This newfound freedom from monthly payments and the added benefit of owning your property outright opens up lots of financial opportunity for retirees.

How to Plan Home Ownership during Your Retirement?

Home Ownership during Your Retirement

From equity release to downsizing, we go through our guide of how to get the most of your capital tied up in home ownership during your retirement. Have a look:

01. Paying Off Your Mortgage

Paying Off Your Mortgage

You might have timed your mortgage to come to the end of its term when you intend to start retirement. Hopefully, you will be able to make the final payment and be done with your mortgage. However, some mortgages are arranged so that you will have a final payment of the balance of your mortgage at the end of its term. To prepare to own your home outright, make sure you have any payment saved to pay the balance of your mortgage.

If you are new with the term mortgage and want to know more about its approval, here is a Must Read for you:

3 Tips to Ensure Approval from Your Mortgage Lender!

02. Releasing Equity from Your Home

Equity release plan

If you own your home totally before you reach retirement, you might want to benefit from an equity release plan that allows you to free up tax-free funds in your home. You could use the extra capital to fund a once-in-a-lifetime trip around the world, help your family members out or make some home renovations so you can enjoy your home fully in retirement. As long as you own your property and are aged over 55, you could qualify for an equity release plan.

03. Renting a New Property

Renting a New Property

Selling up your current home and renting a cheaper property in retirement is a good way to maximise any profits made during the term of your mortgage. Perhaps it has always been a dream of yours to live a rural life in a country cottage or the live in a house by the sea. By renting, you could possibly try out many different living experiences in your retirement without being tied to one place.

So, before you start renting a cheaper property in retirement, have a look at the pros and cons of renting:

Pros & Cons of Renting a House

04. Downsizing Your Home

Downsizing Your Home

Alternatively, you could sell up and buy a smaller, more manageable house in your local area, freeing up some of the profit from your former home to enjoy your retirement with. Having paid your mortgage off in full, you will have the capital to purchase a smaller, cheaper house outright without needing to take out a new mortgage.

If you want some tips for downsizing your home in a right way, here we have a detailed blog on it:

Downsizing Home to an Apartment in the Right Way!

Final Takeaway

On a final note, who does not want a peace and relaxed retirement? Home ownership during retirement is one of the major concerns that we all look forward to… And we hope that our guide on the same has provided you with the ways to how can you plan it.

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