Is your house your forever home?

You might wonder why I am asking if your house is your forever home. Why does that matter?

Well actually, it is more important than you might think.

A forever home means different things to different people.

For you, it may mean a cosy cottage in the country – you don’t want a large house to look after when you are older. For others, they want a big house so family can stay, but they want to be close to amenities.

Of course, as time progresses your perspective on your forever home might change too. When you are in your twenties having a big house in the future might seem very attractive, but when you are in your sixties you might see it very differently.

If you want to downsize as you grow older you may gain extra income, assuming you don’t purchase a new property in a more expensive area than your old home. You can factor that into your financial lifeplan but remember, right now it is outside of your bucket.

Equally, if you decide to go larger, you will need to budget for the additional income needed to purchase your perfect home.

There are various ways to fund a new property – you can use income and then set up an equity release to clawback your savings as a regular income for your lifestyle. Or if you want to retain your savings, you could take out an interest only mortgage, which helps to keep your monthly outgoings at a reasonable level.

Whilst that might all seem like too far in the distance to worry about, there are implications on how you live now, based on the future.

For example, if you don’t plan to stay in your house for many years, is it worth investing heavily on extensions, remodelling or replacing kitchens and bathrooms? That does depend on the area you live in, the current state of the property and what the market can bear. Each area has its own cap, which is hard to break.

Balanced against that, you will want a good quality of life in the home you have now. If room layouts or other features of the house frustrate you, then it’s important to find a solution so you are happy.

Sometimes you may be forced to rethink. One of my clients was certain that they wanted to move to a larger home and make one last leap. However, when they started the property search they couldn’t find what they wanted. There were things they were not prepared to compromise on, and they just couldn’t be avoided.

As a result, they decided to stay where they were. That made them look again at their current home and invest in it. Suddenly they saw it in a new light – with some remodelling and refurbishing it was going to be ideal for what they needed for at least the next few years.

I am hoping I have given you some food for thought. Talking about this is part of what I do when I take on new LifePlan clients. And we revisit it during our annual reviews – because plans change.

If you would like to talk about a financial lifeplan to help you meet some of your goals, please contact me on 01344 875 310.

Start getting a return on your life…

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Your forever home
Start getting a return on your life…

First steps: Take your free Return on Life Index assessment