The transition to retirement comes with a lot of change. Along with going from being a person who works most of the week to a person with more free time, many retired people need to think about their living situation. It is an often-overlooked step in retirement planning.
Most older people want to stay in their homes as they age. According to one survey, 88% of adults from ages 50 to 80 said they would prefer to age in place. While it might sound like a simple decision on the surface, a lot goes into determining whether a person can age at home.
For many, the suitability of their home can be a deciding factor. This is why people should consider remodeling their homes to make them more suitable for aging individuals. It can be a good investment whether you are nearing retirement or newly retired.
With that said, these remodeling projects can be expensive. The following financing options can be good for helping people fund their age-at-home remodeling plans.
Spend From Your Savings
Funding it with your savings might be the best option for some people. This is especially true if you haven’t retired yet and have time to replace the funds in your savings. The primary advantage is that you will not have to take out a loan and pay interest, and instead, you can just pay yourself back.
If you are already retired, you will need to be careful when it comes to using your savings. Of course, you might be safe if you planned to have the extra money. However, you also need to consider issues like affordability and the tax implications of taking a large sum from a retirement account.
Home Equity Loans
A home equity loan can be one of the best options if you still have a few years until you retire. You should get approval if you have the equity in your home and a good credit score. They are a good choice because they usually have low interest. Some retired individuals may also want to look into home equity loans for remodeling. You just need to consider whether you have the retirement income to cover the payments.
Getting a conventional loan from a bank or credit union could be a good option for some projects. However, this is another option that is usually better for people who still have a few years left in their working life. The interest with this type of loan will probably be a little higher than with a home equity loan, and this is because the loan does not have the home equity as collateral. With that said, the interest and payments should still be reasonable for most people.
A reverse mortgage might be a good option for some retired people. It is another way to borrow against the equity in your home. However, the retired person does not need to make payments on the loan. This makes it a good option for accessing capital when you don’t have the retirement funds to make loan payments.
While it might sound like a great deal, there is a lot to consider. The experts from reversemortgagereviews.org tell retirees they need to be careful when agreeing to a reverse mortgage. The terms of these loans can vary significantly. Along with that, you also need to check out different loan providers.
Credit cards might be an option for some remodel projects. The issue with credit cards is that they tend to have high interest, and that means you are likely to pay more to borrow the same amount of money. However, it might not be a bad choice if you have the credit and believe you can pay the money back quickly. It could make sense on a low-cost remodel project as long as you have the income to pay it back quickly.
You might also be able to get financing through your contractor. Some contractors partner with banks and other lenders to provide financing for projects. In many cases, these loans have reasonable terms. You may also have contractors that offer financing without the backing of a lending partner. As long as you qualify and can make the payments, this can be a good way to fund your age-in-place remodel project.
Some banks also offer home improvement loans. They are loans designed for funding home improvement projects. In some cases, they are a type of home equity loan, and in others, they are unsecured. Since the loans come from a bank, they are usually a good option for funding remodel projects.
A little remodeling work can do a lot to help you stay at home during your retirement years. There is a lot you could do from wider doorways to smart technology. However, you will need the funding. With the options in this post, you can fund your age-in-place remodel.