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Have the open-concept floor plans of new homes and the energy efficiency of a brand-new home left you thinking about selling your home of 25 years — not to mention historically low interest rates?
There are a number of advantages to a new home — the aforementioned energy savings, which can net you a 20 percent lower utility bill on average — even if your new home is larger. Newer homes are often friendlier on the environment and for those who live there, thanks to moisture-control systems in place as well as features ensuring excellent air quality. And a big plus is the fact that your home is new — the roof doesn’t need replacing, the oven is operational and the air conditioning unit shouldn’t need to be replaced any time soon. And if there is a problem, unlikely though it may be, you can rely on your homeowner’s warranty.
Less time spent on maintenance, lower utility bills and a beautiful, modern home? We can certainly see why people of all ages are buying new.
If you’re seriously considering jumping back into the home-buying arena after years away, we have some things to consider:
Consider a 15- or 10-Year Loan
If the sale of your current home doesn’t cover the cost of your new home, don’t automatically think you have to take out a 30-year mortgage. Today’s low interest rates make 15- and 10-year loans an option — something you might want to consider if you’re retiring around that same timeframe. Your interest rate will be lower — an average rate for a 15-year mortgage in mid-February was 2.361 percent and 2.290 percent for a 10-year loan. And while your payments will be higher than a 30-year mortgage, they aren’t that much higher than if you had purchased when 30-year rates were nearly 5 percent about 10 years ago. And for those who haven’t purchased a new home in 30+ years, your 15-year loan payment would be hundreds less than a 30-year loan at the 8 to 9 percent interest rates of the early ‘90s.
Is This Where I Want to Stay?
If you want this to be the last home you buy, give special consideration to the home’s location. Are grocery stores, big-box stores and other retailers offering everyday essentials within an easy drive? Are reputable healthcare facilities nearby? In later life, you don’t want to drive across town just to get a few items at the store.
Master-planned communities like Cross Creek Ranch offer a wide range of home designs in an array of prices, which means it’s possible for you to move into a home more suited to a retiree budget and still live near children and grandchildren. Or, conversely, that the kids can buy their first home near you. Home buyers who are age 55 or older have an additional choice in Cross Creek Ranch — Bonterra, an active-adult community. Homes there are specially designed for the needs of older homeowners, plus Bonterra residents enjoy an engaging lifestyle with a dedicated amenity center and on-site lifestyle director that maintains a busy resident calendar.
Don’t Forget About Closing Costs
If it has been a while since you’ve purchased a home, don’t forget about closing costs — these are fees in addition to the purchase price of the home. Even if you buy your new home outright, you’ll still have to pay for the owner’s title policy, a final survey, any HOA transfer fees and other charges. The good news is some builders offer incentives that help cover some or all of closing costs (another advantage to buying new!).