“OK boomer”. This common, cross-generational catchphrase with a hint of affection and a heap of irony is used by younger generations when speaking to those whose opinions and outlooks are perceived to be out of touch. Just the same, Canada’s boomers (aka Baby Boomers) are 9.1 million strong and, in spite of being viewed by subsequent generations as a bit old fashioned, their influence on many aspects of society is undeniable. Boomers are rapidly approaching the age of retirement and many are there already. But they’re also living longer than any generation before them and decidedly staying in their homes longer. In so doing so, they’re altering the shape of Canada’s real estate market.
Boomers grew up in an era of affordable housing, when owning a home was an attainable dream and a hallmark of the generation. While the Canadian housing market has changed dramatically over the years, the values and attitudes associated with owning a home have not, “as millions of boomers are expected to wade into the housing market over the next five years,” according to a recent Royal LePage survey.
Having previously experienced a robust and thriving economy, and relatively low housing costs and competition, boomers may be ill-prepared for today’s fast-paced, highly-competitive and digitally-charged homebuying pursuit. This is why even the most seasoned boomer-buyer should seek professional advice from a qualified mortgage agent.
An experienced agent is in tune with Baby Boomer needs including financial requirements, retirement and lifestyle goals, saving and spending habits along with healthcare costs. The mortgage broker channel has grown considerably over the years, but may not have been common when boomers took out their first mortgage. Here are just some of the advantages agents offer:
- Represent your interests and offer personalized service
- Provide access to a wide range of lenders and mortgage products
- Obtain multiple quotes
- Help you understand all the options through advice and expertise
- Guide you through the entire mortgage financing process
- Undertake all of the legwork, research and paperwork
- Often free for borrowers, agents are paid through the lender where the mortgage is placed
If you’re like most boomers, the desire to ‘age in place’ has diminished any notion of retirement-home living. There are a number of ways this can be achieved including buying a new home, investing in renovations for your current home or tapping into your home’s equity to access additional cash.
Buying
If you’re an empty-nester, you may want to downsize to a more suitably-sized abode with less maintenance such as a condo or townhouse. Or perhaps you’re looking to replace a fast-paced city life by moving to a less densely populated community. If you find yourself in a full-nest situation living with your adult kids or older parents, you’ll want to consider a multigenerational home. Whichever route you chose, your agent will guide you through all aspects of the homebuying and mortgage financing processes.
Renovating
If you decide to stay in your current home, you’re not alone! Of boomer homeowners surveyed, 52% said they’d prefer to renovate their existing home rather than purchase another. Living in your home longer, you may want to invest in upgrades or improvements, or install retrofits for safety and accessibility now and into the future. Your agent can outline your renovation financing options including a home equity loan, which provides you with funds in a lump sum payment, or a home equity line of credit (HELOC), which allows you to draw the money as you need it.
Reverse mortgage
For some boomers, the high cost of living over the years has made saving difficult. In fact, 36% of Canadians admitted they started saving late for retirement. And for those already retired and living on less income than before, financial obligations can be burdensome.
With the advice and guidance of your mortgage agent, you may want to consider a reverse mortgage, which allows you to borrow up to 55% of your home’s equity without having to make regular payments as you would with a traditional loan. The money you receive is tax-free and doesn’t affect any other income you receive from government programs.
It’s important to note that the home you use to secure the reverse mortgage must be your primary residence. If you reside outside of your home for an extended period of time, talk to your mortgage agent to ensure you qualify.
Have questions about mortgage options? Answers are a call or email away!