Have you already reached midlife, yet still harbor housing aspirations? Do you continue to seek a larger habitat?
Then you’re not alone.
Many Baby Boomers-between their late 30s and late 40s-are still trying to climb the housing ladder. Their children may have grown and moved away, yet their yearning for a larger home continues, real estate specialists say.
“We Baby Boomers don’t see ourselves getting older. We picture ourselves maintaining or improving our lifestyles in the future,” says Sherry Smith Mancini, president of the Women’s Council of Realtors, a professional association representing more than 14,000 in the field.
Many current homeowners want to move to a dwelling with ample space for an office. It’s all part of the work-at-home trend sweeping the country, Mancini says.
“A lot of people are now working at home at least 50 percent of the time,” she says.
Mancini, who is 39 and the owner of her own real estate firm, illustrates the trend. She recently gave up a waterfront condominium in favor of a two-story Spanish-style house. One of the major factors prompting the move was that the bigger house provided Mancini a first-floor office with a large bay window.
Economic factors are another reason why many Baby Boomers are late in attaining the larger house they’ve long been seeking. A number of today’s moveup buyers have only recently made a financial recovery from the credit card debt they amassed in the 1980s, Mancini says.
“They’re recovering from the excesses of the past,” she says.
But the quest for larger housing comes with considerable anguish for many mid-life tradeup candidates who can’t decide whether to spend more on housing or save for retirement, says Rhonda Richardson, an agent for the Coldwell Banker chain.
“The yuppie generation is getting older and their window of opportunity to save for retirement is not that long,” Richardson says.
Are you torn between moving up and staying put? Then these five pointers could help you decide what to do.
1. Don’t let tradition rule your life.
In past decades, the prevalent custom of many Americans in mid-life was to head for smaller housing. But these days, more people are choreographing their own steps rather than letting tradition dictate their moves.
Many mid-lifers “are not willing to run to a bungalow or a one-bedroom condo,” says Richardson, the Coldwell Banker agent.
If you’ve done a thorough analysis of your financial situation and are convinced you can afford a heftier house payment, don’t let custom inhibit you-even if you’re a single person in your 40s seeking a five-bedroom house, Richardson says.
“It’s never too late to do what you feel is right for you,” she says.
2. Use a mortgage lender to help you decide whether to move.
Most people turn to a mortgage lender only after they’ve found a home and are seeking a loan.
But a good lender should be willing to assist you much earlier in the process, well before you’re committed to a major purchase.
Through the use of qualifying ratios and other statistical measures, a good mortgage representative can give you a general sense of your capacity to handle a larger home loan.
Remember to tell the lender about all your outlays, not only those about which he asks. Are you, for instance, participating in a retirement-savings program or making big annual contributions to your church or synagogue? Then be sure such information is part of the lender’s analysis.
3. Ask an accountant for extra help.
For more extensive counsel, it could be worth the expense to engage the services of an accountant, Richardson says.
Most accountants are “reliable and unbiased,” she says.
4. Use “worst-case scenarios” when considering a home purchase involving an adjustable rate mortgage (ARM).
Fully 59 percent of the current mortgage market involves ARMs. With a classic ARM, the interest rate can increase as much as 6 percentage points within a three-year period.
All too often, prospective buyers think only about the payment they’ll confront during the first year of the ARM, Richardson says. Instead, they should look at the highest possible payment they could face during the term of the mortgage, she believes.
6. Place your housing hopes within the hierarchy of your value system.
“Staying put is a confusing strategy for a lot of people,” observes Dave Beson, a national real estate speaker and consultant.
To many households, a home represents more than simply a material item like a car or a boat. Where you live and how you live influences many elements of your lifestyle-including household dynamics, commuting time and the extent to which you’re vulnerable to crime.
A good way to discover the importance of a housing move in your value system is to list all your goals and rank them in order of priority. By doing this, you may find that better housing is less important to you than, say, the chance to travel abroad. Or it may be just the reverse.
Right or wrong, many in the Baby Boom generation still place a high premium on attaining a tradeup property, Beson says. If you fall into this category, he recommends you honor your housing aspirations.
“Buy the biggest piece of the mountaintop you can truly afford,” he says.
