You absolutely need to get this step out of the way first, before you do anything else related to searching for a home. While most homeowners entering their senior years will be able to afford to move from a larger home to a smaller one, you still need to do your due diligence before going through the process of purchasing a new home. You don’t want to get your hopes up for nothing. You must work within your price range, both as a starting point as well as a general guideline. As we’ve talked about before, know your budget! And don’t forget to take into consideration those “hidden” costs as part of your budget and what you can afford overall. If you’re not quite sure where to start, you should consult with a financial advisor or a CPA.
Step #2: Get Pre-Approved for a Loan
This step ties directly into Step #1. Part of knowing what you can afford and being financially prepared is understanding whether you are pre-approved for a loan. Even as a seasoned homeowner moving from a larger home to a smaller one, it’s a mistake to assume you can handle the purchase without verifying your financing options. While you may stand to make a profit from selling your current home and enjoy additional cash flow in retirement, you still need to confirm that you qualify for a loan—if you aren’t buying in all cash—before moving forward in the home-buying process. Knowing your limits upfront helps you stay on track and avoid financial trouble. Be practical, make decisions based on your budget, and stay smart throughout the process.
Step #3: Hire an Agent
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