5 Mistakes New Retirees Make When Purchasing a Home (and How To Avoid Them)

One of the most exciting parts of retiring (along with leaving work behind) is moving into a new home. It gives you a chance to hit the reset button, clear out unwanted clutter and settle into a place better suited to your senior years.

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But as with any new home purchase, you need to be aware of what not to do. The usual rules apply to new retirees: Don’t buy more home than you can afford, don’t skip the home inspection, etc. But there are also certain “don’ts” that apply specifically to new retirees.

Here are five mistakes new retirees often make when purchasing a home — and how to avoid them. Also see other mistakes retirees make with their money.

Putting Too Much Cash Toward a New Home

Younger people have the financial wherewithal to put a lot of cash toward buying a new home — mainly because they have many working years left to earn money. But when you are newly retired and on a fixed income, you need to keep more cash around to deal with unexpected medical bills and other expenses.

“Retirees often aim for the lowest payment possible, which is understandable, but don’t let that be your only focus,” mortgage lender Jennifer Beeston wrote in a recent LinkedIn post. “If you drain all your savings on the house and then you’re stuck using credit cards for emergencies? That’s going to create more problems down the road.”

The better option is to pay only enough cash to make the down payment and then keep the rest for future living expenses.

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Locating Where It Doesn’t Make Sense

One of the biggest decisions you’ll make as a new retiree is where you want to live. Although you might be tempted to move to a new location for a change of scenery and a fresh start, don’t make the mistake of going somewhere that might not make financial sense.

For example, if you move far away from children and grandchildren, you’ll face the prospect of having to pay for frequent travel to see them. The problem also goes the other way – buying a home near family even though it’s in a market you can’t really afford. You an avoid this mistake by carefully planning a budget that considers both home costs and travel expenses and then settling on a place that keeps both costs easily manageable.

Buying a Home That Requires Having a Car

You might not realize it now, but there will come a time in the not-too-distant future when driving a car becomes both inconvenient and potentially dangerous. As a new retiree, it’s a mistake to buy a home in a remote location far away from needed amenities such as stores and healthcare facilities. Instead, buy a home where you have quick and easy access to public transportation, taxis and rideshare services.

Basing Your Home Purchase on Pre-Retirement Income

As Beeson noted, many retirees make the mistake of budgeting for a home based on what they used to earn instead of what they’ll actually bring in during retirement.

“Here’s the trick: Base your new home budget on your expected retirement income, not what you’ve been making up until now,” she wrote. “Make sure your monthly mortgage payments are affordable even if your Social Security or pension doesn’t increase over time.”

Putting Too Little Emphasis on the Home’s Condition

When you buy a new home, you’re also buying its problems. Many younger homeowners have the extra money and physical ability to make repairs, replace appliances and finance upgrades and additions.

But that’s not the case for most new retirees. For one thing, you might not have the physical ability (or desire) to do DIY repairs and upgrades. For another, you might not have the extra funds to pay for professionals to do the work. When buying a home as a new retiree, look for something modern and move-in ready.

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This article originally appeared on GOBankingRates.com: 5 Mistakes New Retirees Make When Purchasing a Home (and How To Avoid Them)