Should I Sell My House When I Retire?
Retirement can be a wonderful time but with it comes challenges. If you’re wondering whether or not you should sell your home when you retire, there are several options available to you. It doesn’t matter when you need to raise cash to pay the bills or relocate for an entirely new lifestyle, selling up and moving on has its advantages and its drawbacks. As long as you assess all of the options available to you, there’s no reason why you can’t choose the right option for your circumstances.
What Are the Benefits of Selling Your Home When You Retire?
- Boost your post-work income
- Live the life you desire and where you want
- Avoid future house price fluctuations
- Avoid maintenance and repair bills
- Cut utility bills
- Reduce your council tax bill
- Move to a one-storey house
Of course, you will still have to live somewhere, so you might want to consider downsizing, either regarding the size of your home or its location. But whatever path you choose to take, it’s important that you choose the right option for you. Decide whether a quick sale or the highest possible price is your priority, and proceed accordingly.
What are the alternatives to selling a house for retirement?
If you want to sell your home but remain in it, an equity release scheme could be a valid option. You must own your home outright and be at least 55 years old to qualify. In exchange for all or a percentage ownership of your home, you will receive either a regular income or a cash lump sum.
However, this way of raising money will affect what you leave your family in your will. Use the monies for anything you like, including home improvements. There are no repayments; your debt (plus the agreed interest) is repaid to the loan provider after you and your partner pass away — upon the sale of the property.
Another option to consider is the lifetime mortgage, which allows you to take money out of your home’s equity as a lump sum or regular payments. You agree a fixed rate of interest, and what you’ve borrowed is paid back after you pass away or enter the care system. Once again, this will seriously eat into your home’s equity and restrict what you can leave your family.
However, this can be an expensive means to release cash from your home. The company will charge compound interest, which means interest on the capital you originally borrowed as well as on the current interest you’ve accrued.
An option that will allow you to reduce the inheritance tax paid on your estate is a home reversion. You only borrow a lump sum in exchange for a percentage ownership of your property. You remain in your home rent-free afterwards — until you die. However, the longer you live and stay in your home, the more the loan provider takes from your estate when you pass away.
Selling your home outright
The decision to sell your home outright upon retirement will depend on your current circumstances, and what you are planning for the future. All of the options above are predicated on the fact that you’ll be remaining in your home, even though it won’t be entirely yours. But this may not help you if you are planning to buy somewhere in the sun. You’ll need all the money you can find to either pay rent or buy a new home elsewhere.
So-called downsizing involves moving from a bigger house to a smaller one. Downsizing usually involves selling the house you live in and buying a smaller, cheaper home. Any extra cash left over can be used for a range of purposes, including:
- Helping children get on the housing ladder
- Avoiding future ‘mansion taxes.’
- A better standard of living during retirement
- Luxury purchases such as cars
If you’re calculating how much you’ll need to sell your home for to realise your goals, there are a few added costs you should consider:
- Legal fees
- Surveyor fees
- Estate agent fees
- Stamp duty
- Fluctuating interest rates
- Moving costs
There is also the matter of time to consider. The more time your home spends on the market, the more expensive the whole process is likely to be. And let’s face it; you’ve worked your entire life, and you want to start enjoying your retirement as quickly as possible. If time is of the essence, you can avoid the open property market altogether.
Start your retirement as quickly as possible by selling to a house buying company
Especially if you have plans to move away for your retirement, your existing home can end up holding you back. Even if things run smoothly on the open market, you probably won’t receive the funds from a sale any sooner than three months from listing your property.
Selling a home the traditional way can result in a wide range of snags and complications, many of which can delay or completely stop a sale. Why put your retirement on hold when you can sell your home in just a matter of weeks.
Selling your home to a house buying specialist such as Flying Homes gives you the certainty you need for retirement. Not only do you get a fair price based on current market conditions, but you also get an idea of how long it takes before you can grab your cash and start your new life. You don’t need to ensure marketing, endless property viewings, price negotiations, property chains, conveyancing and a nervous wait. Just accept the offer, and let the house buyer do the rest.
The way house prices tend to rise over long periods of time means your home could fund your retirement plans without too much fuss. Quitting work for good is a huge step, so you need to know you have the funds in place to live the life you want during your golden years. By utilising your home’s value appropriately, you should be able to look forward to a relaxing and comfortable retirement.