Home Buyer Tips

Buying for Retirement: 3 Reasons Why You’ll Want to Buy Your Retirement Home Before You Retire

Buying for Retirement: 3 Reasons Why You'll Want to Buy Your Retirement Home Before You RetireMany people dream of buying their ideal retirement home after their career has come to a conclusion – with all that extra free time it seems like it’d be the most logical time to shop around.

However, many real estate professionals strongly recommend that their clients find a retirement property before they’re off the payroll. While it may seem like a big time commitment to find a new home while you’re still busy with your work there are several significant financial benefits to purchasing your retirement home before you actually do retire. Here are our top reasons why.

It Makes Your Mortgage Easy

When you are employed it is easier to get approved for a mortgage. If you wait until after you retire to buy your retirement home, you may not have the income require to qualify for the mortgage that you need. Don’t limit yourself! Buy while you’re still employed to keep your options open.

It Leaves You With More Spending Money

Buying a new home while you have an income provides you with more security with your expenses, such as mortgage payments and planned upgrades or renovations. Having an income can also mitigate financial stress should you run into any unexpected expenses after closing.

It Leaves You Ready For Reality

You may think you can accurately predict the expenses of your new home, but if you buy the property before retiring it gives you time to get to know the true amounts of your monthly payments. This can help ensure that you have enough saved to retire and live comfortably in your new property, with no surprises for your budget. You’ll be in a better position to create a financial plan once you know the reality of owning your new home.

An Added Bonus: It Can Be An Income Property

If you decide to purchase your retirement home before you retire you don’t have to move into it right away. You can rent it out as an income property until you’re ready to settle in, which will not only help cover mortgage payments but will also allow you to see first-hand what the monthly expenses are for the property.

This will also prevent you from having to deal with a move while working; you can wait until you do finally retire before packing up your current home and moving into your new one.

Contact your trusted mortgage professional today for more advice to set yourself up for the future.

Home Buyer Tips

What is a Home Warranty?

What is a Home WarrantyA home warranty is a type of service contract that provides coverage for repairs or replacements of major systems and appliances in a home. It typically covers items such as heating and cooling systems, electrical systems, plumbing, water heaters, and kitchen appliances.

Home warranties are purchased by homeowners to protect against unexpected expenses for repairs or replacements that may occur due to normal wear and tear.

When a covered item breaks down, the homeowner can contact the home warranty company, which will send a qualified technician to diagnose and repair the issue. If the item cannot be repaired, the home warranty company will typically replace it with a similar model.

It is important to note that home warranties are not the same as homeowners’ insurance. Homeowners insurance covers damage to the structure of the home and personal belongings due to unexpected events such as fires, storms, or theft. Home warranties, on the other hand, cover the repair or replacement of items due to normal wear and tear.

What’s generally included in a home warranty?

The items that are typically included in a home warranty can vary depending on the specific plan and provider, but they generally cover major systems and appliances in a home that are subject to normal wear and tear. Some of the most common items included in a home warranty are:

Heating and Cooling Systems – This typically includes coverage for furnaces, heat pumps, air conditioning units, and ductwork.

Electrical Systems – Issues with your home’s electrical system can be expensive and dangerous. Having these covered makes sure that your home stays safe. This includes coverage for the main electrical panel and wiring throughout the home.

Plumbing Systems – Just like electrical repairs, plumbing issues often require a professional and can cause major problems if not fixed right away. Having these things covered by a home warranty will cut repair costs and includes coverage for the water heater, pipes, and drains.

Kitchen Appliances – This includes coverage for the refrigerator, oven, dishwasher, and built-in microwave.

Laundry Appliances – This includes coverage for the washer and dryer.

Garage Door Opener – This includes coverage for the garage door opener and related components.

It’s important to note that while these items are typically included, each home warranty plan is different, so it’s important to read the details of the plan to understand what is and is not covered. Additionally, there may be optional add-ons available for specific items or systems that are not covered under the basic plan.

Home Buyer Tips

The Role of Escrow in Real Estate Transactions

The Role of Escrow in Real Estate TransactionsPurchasing or selling a property is a significant financial transaction that involves numerous parties, legalities, and a substantial amount of money. To ensure a smooth and secure process, the real estate industry relies heavily on a mechanism known as escrow.

Understanding Escrow

Escrow refers to a neutral third-party entity or professional, typically an escrow officer or a title company, entrusted with holding and disbursing funds and documents during a real estate transaction. It acts as a safeguard, ensuring that all parties fulfill their obligations and that the transaction progresses smoothly.

How Escrow Works

Once the buyer and seller have agreed on the terms of the transaction, they initiate the escrow process by opening an escrow account. This involves selecting a trusted escrow officer or company and depositing the agreed-upon funds into the account. The escrow officer gathers all necessary documents, including the purchase agreement, title documents, loan documents, and any other relevant paperwork. Simultaneously, the buyer deposits the earnest money into the escrow account, demonstrating their commitment to the transaction.

The buyer typically has a specific period to conduct inspections, investigations, and other due diligence activities on the property. If the buyer finds any issues or discrepancies during this period, they can negotiate repairs or request changes to the terms of the agreement.

Once the buyer is satisfied with the inspections, due diligence, financing, and title search results, they proceed to remove any remaining contingencies, such as the inspection contingency or loan contingency. After all contingencies are satisfied, the closing process begins. The escrow officer prepares the closing documents, including the settlement statement, and coordinates the signing of these documents by all parties involved.

Once the necessary signatures are obtained, the escrow officer ensures that the funds from the buyer and the buyer’s lender, if applicable, are collected. Finally, the officer disburses the funds to the seller, paying off any existing liens or mortgages, and transfers the title to the buyer.

Benefits of Escrow in Real Estate Transactions

Escrow provides a secure and neutral environment for both buyers and sellers. The escrow officer ensures that funds and documents are held safely until all conditions are met, preventing either party from misusing or misappropriating them. Escrow also protects all parties from potential risks and fraudulent activities.

By safeguarding funds and documents, facilitating clear communication, and ensuring compliance with legal and financial obligations, escrow mitigates risks and promotes a smooth transaction process. Engaging a reputable escrow officer or company can offer peace of mind to all parties involved, making the real estate transaction more secure and efficient.