Life changes as you grow older, and you move into your sixties. It’s natural to wonder what you will do with your assets when it comes time to plan for your retirement and your legacy. As a homeowner, you will be presented with a choice when it comes to your residence: do you want to stay in your current home, or do you want to sell your home in search of a better fit for the years ahead? At The Federal Savings Bank, we’re proud to help American consumers like you finance their housing plans—whether those are downsizing, upsizing, or right-sizing.
Maybe your children have moved out and you want to find a home with fewer bedrooms, or maybe you are simply looking to have a lower monthly payment on your home when you retire. Either way, downsizing your home could mean seeking out a smaller and/or less expensive home than the home you currently own. The Federal Savings Bank proudly offers home lending options that are popular among downsizers. These include rate-and-term refinances for those seeking a lower mortgage payment each month. Downsizing also includes condo loans for homes in Florida and other popular retirement destinations.
You may be able to guess from context that the opposite of downsizing is upsizing, the practice of purchasing a larger home, or otherwise upgrading the home you currently have. If you have been diligently paying your mortgage for a number of years, it’s likely you have significant equity built up in your current home. This means that when you sell or refinance your home, a lender may be willing to allow you to borrow more money than you think. You might even be able to take “cash out” to fund the purchase of a second home or investment property – these too count as upsizing.
More and more borrowers are taking advantage of reverse mortgages to fund their upsizing plans. These special home loans are for borrowers 62 and older, and unlike most mortgages, they do not require a monthly payment.
Right-sizing is another term for downsizing or upsizing. It is described by Grace Management as primarily “about finding the ideal living space that suits your current lifestyle […] finding the perfect fit for your needs.” The term “right-sizing” may be used by a mortgage professional like a Lending Professional at The Federal Savings Bank, as they help you adjust your future plans to your needs.
Eligibility requirements apply. HECM Counseling is required. Subject to credit and income approval. You must occupy the residence as your primary home. You must continue to pay for property taxes, insurance payments, homeowners association fee, home maintenance costs, and other fees as required. You must have significant cash available for the down payment. The balance of the loan grows over time and interest is charged on the balance. The loan becomes payable when the last borrower on eligible non-borrowing spouse passes away, sells the home, permanently moves out, defaults on taxes, insurance, or maintenance, or otherwise does not comply with the loan terms.
This article is intended for general informational and educational purposes only and should not be construed as financial or tax advice. For more information on financial planning or investment advice, consult a registered investment advisor or financial planner. For tax advice, please consult a tax professional.