At some point in life, you’ll want to improve some inconvenience in your home. It might even be a lingering problem that should be re-engineered rather than repaired. However, there are times when your family’s income might not be able to pay for the improvements you want to make. Different stages in your life also pose different challenges to your lifestyle and income. Our Preparing for Home Improvement Costs Series will examine a few of the problems you might face so you can anticipate and navigate home improvements in your future.
Planning for Retirement
The working definition of retirement is changing. The old model followed that when the children grow up and leave home, the older parents downsize to a smaller, easier-to-maintain home. Nowadays, aging Baby Boomers are deciding to age in place. A 2010 survey by AARP found that Baby Boomers prefer to remain in their current homes for as long as possible because they are healthier, wealthier, and plan to work into their 70’s (or beyond).
In terms of a little broader age statistics, about 63% plan to stay right where they are because they are in a much more advantageous financial position with just over half (52%) of all households aged 55+ owning their homes free and clear. Only one-fifth of households aged 80+ have a mortgage on their primary residence.
Aging In Place
With the aging population living longer, remaining in their homes, and in better health than prior generations of retirees, people in their early senior years now plan to plan for the days when they will require more accessible features in their homes to help them get around. This includes widening doorways and rooms to accommodate wheelchairs, moving bedrooms to the main floor, installing shower grabs and stair hand rails.
Other important home improvement considerations such as:
- Reducing trip and fall hazards by replacing deep carpeting with hardwood flooring and ensuring entryways are flush with little or no threshold;
- Ensuring that deck and patio floor levels are no more than 1/2 inch lower than the interior level;
- Investing in low maintenance exterior finishes and windows;
- Installing well-lit kitchens and baths with easy to reach cabinets;
- Purchasing appliances with easy to read controls and convenient doors that don’t require bending down (eg. front loading laundry machine); and
- Upgrading to low-maintenance and energy-efficient heating and cooling systems.
Of course, you probably don’t need to do all these improvements at once. However, creating a timetable for the improvement you want will make the financing process easier. You want a better understanding of how much money you’ll need to spend and when you want to do it.
In addition to your cash savings, you also may have other assets you can draw on, including any Individual Retirement Accounts (IRA’s), Certificates of Deposit (CD’s), assorted investments, or other nest eggs. And, as already mentioned, if your home is paid off, you could take out a home equity loan to pay for improvement projects. However, if your resources are more limited, you still have options for financing important improvements to your home:
Already mentioned in the first installment, Title I from the United States Department of Housing and Urban Development (HUD) works with local lenders to finance home improvements up to $25,000 (Any loan over $7,500 must be secured by a mortgage or deed of trust on the property.) HUD insures local lenders against loss. Applicants must have a good credit history and be able to repay the loan in regular monthly payments.
As mentioned in a previous installment, HUD’s Rehab Mortgage Insurance program lets homebuyers and homeowners to finance both the purchase (or refinancing) of a house and the cost of its rehabilitation through a single mortgage or to finance the rehabilitation of their existing home. Title I can be used in conjunction with this. Costs must exceed $5,000 but can include adding additions, energy improvements, modernization, etc.
Created by the United States Department of Agriculture (USDA), this program provides loans and grants to homeowners to repair, improve or modernize their homes. The department also offers the Rural Housing Repair and Rehabilitation Grant, which is available to homeowners 62 and older; funds may be used for repairs to improve health, safety or make the home accessible for a resident with disabilities.
This program helps low-income homeowners by improving the safety and health of their homes. They rely on skilled trade professionals volunteering with local affiliate organizations to provide leadership and expertise during a project. Applications are through your area’s local program.
Courtesy of Habitat for Humanity, this program provides major home repairs that can prevent injury to senior homeowners or from having to move to assisted living. All taxes must be paid up, the house not in danger of foreclosure, property cannot be assessed at over $100,000, and the house must own and live there.
Interested in pursuing any key home improvement projects to your home as you prepare for retirement? We recommend that you peruse the National Directory of Home Modification and Repair Resources, as it’s a listing of state and local agencies, organizations, and professionals that can help you locate any assistance you might need with financing and completing any upgrades to your home.
Do you have any recommendations on how to prepare for retirement so you can afford crucial home improvements that will enhance your quality of life when you become a senior citizen? Share with us in the comments!