Ask Stacy: Am I Too Old to Buy a Home?

A reader is thinking of buying a home, but wonders if she’s a little long in the tooth to start the process.

Like it or not, there are certain things in life that have an age limit. Joining the army, playing professional football and being a runway model, for example. But what about buying a house?

Here’s this week’s reader question:

Should I purchase a home if I am over 45 years old? I have never owned a home and I’m thinking of purchasing a home as a first-time homebuyer. I think I might have waited too long. Please advise. — Patricia

The short answer to your question, Patricia, is no: You’re not too old to buy a home. I’m 58, and bought one for investment a couple of years ago. I’m also thinking about buying another one to live in, although I’m not sure I’ll do that anytime soon.

Homes are expensive and can be complicated to finance and difficult to keep up. But at the end of the day, they’re just another purchase, like a car, washing machine or anything else. Which raises the question: Why are you concerned you’re too old to own one?

I suspect it’s because you’ve never been down this road before and are afraid it may be too much to handle, especially as you approach your retirement years. Or perhaps because you’re afraid of having a mortgage during retirement.

Let’s start with a video about buying vs. renting. Check it out, then read on.

Owning can be awesome

I bought my first house at age 21, and with the exception of a few months in transition, have owned at least one ever since. Why? Let me count the ways.

1. It’s often cheaper than rent. I haven’t made a fortune owning homes, but I’ve certainly never sold one for less than I paid for it. Granted, after all the time, effort and money I’ve invested in fixing up my various homes, my returns may be less than stellar. But since I have to pay to live somewhere, I might as well use my housing money to build equity for myself rather than my landlord.

There are places where I couldn’t afford to own a home — Manhattan comes to mind — but if I can afford it, I’ll always buy. Even when I’m 90. After all, it’s the only investment you can live in, and after you shuffle off this mortal coil, those you leave behind can use it as well.

Check out our recent story, “Owning a Home is Cheaper Than Renting in Many Cities.”

2. You call the shots. You only live once, so you might as well do it in a place you enjoy. Want a skylight or a hot tub? Put them in. Want to paint your kitchen red or add wood flooring in your bedroom? Other than your budget, there’s nothing stopping you.

3. It offers financial security. While nothing is certain other than death and taxes, something else comes pretty close: rising rents. When you own your home outright, there’s no more monthly expense. Even if you have a mortgage, as long as the rate is fixed, your payment will never rise.

4. There’s something for everyone. When I was younger, I was all about “sweat equity,” meaning increasing my home’s value by fixing it up myself. While I still swing the occasional hammer, these days I’m less inclined to do the work personally. But that’s OK, because there are housing options that require less work than a single-family home. I could own a townhouse, which could alleviate a lot of yardwork. I could own a condo, which requires less work of all kinds. I could buy something newer that doesn’t require as much maintenance.

Owning has drawbacks

Of course, there are two sides to every debate. Here’s a look at some potentially bad things about owning.

1. It’s not cheap. There’s no question that owning — at least in some cases — costs more than renting. Houses break, and when you’re an owner, you’ll be either doing the work yourself or paying someone else to do it — probably both. Also, while you can eliminate or at least maintain your monthly mortgage expense, you can’t control rising insurance, property taxes and other costs.

2. It ties you down. Because of the transaction costs of buying and selling homes, you shouldn’t even think about owning if you’re not staying put a minimum of five years.

3. It could go down in value. That’s not something I would have said prior to 2007, but, as millions of Americans have now experienced, owning something that’s worth less than you owe on it is an unpleasant experience.

4. You could have a mortgage in your retirement years. Depending on the type of loan and when she retires, Patricia could be faced with a mortgage at a time when it’s best to keep debt to a minimum. Of course, if she doesn’t buy, she’ll face rent during retirement. But it would still be best, if possible, to minimize the ongoing expense of a mortgage by paying it off while still working. This she may be able to do by taking out a 15-year loan, or taking out a 30-year loan and making extra payments on the principal.

5. It requires some education. Shopping for both a home and mortgage can be daunting. There’s a lot to know, from avoiding a money pit to negotiating for the best financing. Since lots of people do it, it’s obviously not rocket science, but it’s a lot more time-consuming than finding an apartment and signing a lease. Personally, I kind of enjoy the process, but I can certainly understand those who don’t.

It’s time for some soul-searching

Patricia started this by asking if she’s too old to be a first-time homebuyer. Definitely not. But there’s a reason she has hesitated to buy a house, and now’s the time to find out why.

Patricia, take out a sheet of paper, make two columns, and start listing your personal pluses and minuses. I can tell you that you’re not too old, you’ll probably find satisfaction in owning a home, and there’s nothing about the process you can’t learn.

But this isn’t a question with an answer that’s correct for everyone. Do some thinking, talk to some friends on both sides, then make a decision. And remember that whatever you decide, you can always change your mind. Like I said earlier, while buying a house may be a relatively complex transaction, at the end of the day it’s just another purchase.

Got a money-related question you’d like answered?

You can ask a question simply by hitting “reply” to our email newsletter. If you’re not subscribed, fix that right now by clicking here.

The questions I’m likeliest to answer are those that will interest other readers. In other words, don’t ask for super-specific advice that applies only to you. And if I don’t get to your question, promise not to hate me. I do my best, but I get a lot more questions than I have time to answer.

Got any words of wisdom you can offer for this week’s question? Share your knowledge and experiences on our Facebook page.

Stacy Johnson

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  • D Lowrey

    Even though you did not go into it in this article…she could consider a “tiny house”. Have been looking at these options myself and at 52. It’s about as much room as living in the one bedroom and I could have it paid off in about six years.

    • bigpinch

      Another reason to consider a smaller house is the cost of utilities which will probably continue to rise because of inflation if not because of bone-headed energy policies made in Washington, D.C. A small house is cheaper to heat and cool.
      A small house with acreage or at least a big yard makes a small house feel a lot more comfortable. A big yard allows for more life-style choices like an outdoor barbecue and patio, a play area for kids, or vegetable and flower gardens which can contribute to your overall mental and physical health.

  • Rick Chumsae

    For many people on fixed incomes, buying is the safer and more conservative choice. When income is fixed, it is usually better to have major expenses fixed. Even with a 10-year horizon, rent is likely to rise. A fixed-rate mortgage payment stays the same, bringing, usually, greater equity and greater peace of mind.

    In my state, Texas, many municipalities will effectively freeze real estate taxes for 0ver-65-ers, making even that part of housing cost a fixed expense.

    Not all places would draw the same conclusion. I live in a growth city with a likelihood of continued long-term modest growth. That makes the buy decision easier. A shrinking region, with a likelihood of continued shrinkage, would make the rent decision easier.

  • Sherrie Ludwig

    Whenever you decide to purchase, plan to pay it off before retiring. Go to a bank or mortgage company, and based on your income and expenses, get pre-qualified for an amount. Then, this is the most important: look at homes priced no more than 80% of your approved amount. You could set the bar even lower, depending on area and income. THERE IS NO REASON to buy a lot of house to live in, unless you plan to have a dozen kids. Look at area first, for good neighborhood and schools, and last at the house itself. (easier to re-do the house than the neighborhood). Get a home inspection, not to drive the price down, but to budget for the things that will need repair or replacement in time. If you have ten years before the roof needs replacement, the time to start saving for it is at one-tenth the replacement cost each year, so that you have the cash just when needed. A modest, well-kept house in a good neighborhood will sell, if need be, quicker than a McMansion in a merely OK neighborhood.

  • grandmaguest

    Request (or go online) an amortization chart. Then make those extra payments…..check the chart…and you will be able to see the thousands of dollars you can save over the life of the loan by paying a small (extra principal or more) amount each month. On a 30 yr fixed rate loan it’s probably not until well after the 20th yr before your principal is equal or greater than what you are paying each month in interest. It can be a real eye opener! I made it a challenge to myself and had my mortgage paid off well in advance of my retirement. Just think of the money saved that can go into a retirement account.
    And I agree, do your best to not go over 80% of your approved amount. Living beneath your income is a great way to come out way ahead in the long run……become that “millionaire that lives next door”.

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