Are your parents getting ready to retire? Are they living in that same house that you also lived when you were younger? Would it be better that your parents downsize to a smaller home or even relocate to another area conducive to retired individuals? While this may be a lot to consider, it might be far easier to get it done. Yes, for a move like this, there are several emotional, financial, and physical challenges
, but when it is done, it could be better for your parents. There is a list of Lakewood homes for sale that your parents may want to consider, but let’ take a look at why these options could be practical or impractical.
You can help your retired parents to deal with some of the emotional, financial, and physical aspects of their relocation. For one, it may be more challenging for retirees to get approval for a home loan due to several stringent lending standards. This is where you might come in. There are a few options to consider. Qualifying for a mortgage can be a challenge for retirees who no longer earn a regular income. Therefore, you could offer to put up the down payment for your parents, after which your parents may qualify for a mortgage.
Secondly, if you are unable to make the down payment to get one of the homes for sale in Littleton, CO, then you could pay for the house yourself and allow your parents to live in the home while paying rent to you. You could also be a cosigner on the loan, acting as a guarantor and providing your income as a means of qualifying.
Purchasing the Home
If you are not sure of the decision to make, you should look at the advantages and disadvantages of the options that you do have. If you are going to buy the house for your parents, of course, your parents will be thrilled about the prospect. You could opt to buy the home as a vacation or second home while maintaining your own private residence.
You can earn substantial tax benefits with this arrangement, deducting property taxes and mortgage interests. However, you will be liable for the mortgage whether your parents are paying it or not. If they miss a payment, it affects your credit rating. Additionally, making that big purchase may throw some dent into your own retirement savings. However, the pros outweigh the cons. Make sure that the property title is in your name so you can avoid paying the hefty gift tax.
If you cosigned on the home loan, your parents may qualify. Most parents might prefer that you choose this option. This would give your parents some form of the financial independence. More importantly, you don’t have to touch your retirement funds or put up any cash. On the downside, you will be liable for missed payments. However, this is a low risk to assume. You could have your parents pay the mortgage through automatic bill payment.
If you were to buy the home and rent it to your parents, both families win. You now have trustworthy and honest tenants as you continue to earn equity in your investment property. You also can deduct taxes for insurance premiums, repairs, and other maintenance costs. Be sure to let your parents sign a rental lease to make it official.
There are many homes for sale in Highlands Ranch, CO that you and your parents can look at. If you are trying to relocate to the area, Colorado Home Sales
can help you to purchase the right home in the right neighborhood. Contact us today to learn how.