- There are several retirement mortgage options available, so you need to do your research to determine which option is the best fit for you.
- You are never too old to find your forever home, and retirees can qualify for a home loan even without a steady income source.
- Finding a lender who is experienced in granting mortgages specifically to retirees is essential, and The Walk is here to put you on the right path.
Your Guide to Financing a Home Post-Retirement
Congratulations, you’ve made it to the light at the end of the tunnel that is retirement! It’s a time of accomplishment and freedom, as well as many life changes. Armed with newfound freedom and the gift of more time to enjoy life, many retirees want to downsize to a new home with less upkeep and financial responsibility. Although you may have been down this home-buying road before, it’s important to make the right move when it comes to financing your forever home.
Afraid you can’t qualify for a mortgage without a paycheck? The good news is yes, you can! Lenders allow retirees to use many other sources of income to qualify for a mortgage after retirement. Pensions, social security, 401(k)s, annuities, IRAs, and Keogh plans can all be considered as forms of income. There are some stipulations in that lenders are looking for income to be steady and predictable. Like with any loan, your credit score, credit history, assets, and amount of debt will also be taken into consideration.
Reverse mortgages are popular among individuals who have substantial equity (usually at least 50%) in their homes and aren’t afraid to use it. The loans allow borrowers to use the available equity in their homes to defer mortgage payments until they sell the home. Interest is added to the loan balance each month. Homeowners are still responsible for property taxes and homeowners insurance.
All About the Assets
Many retirees face the fear of wondering, “How can I possibly retire to a new home without a steady income?” Fortunately, asset depletion loans allow individuals to qualify for a home loan using their liquid assets instead of regular income. To properly assess your assets, lenders will divide the sum of your assets and equate it to a monthly income. From there, they’ll determine if you can afford continuous monthly mortgage payments and also cover your normal living expenses.
Been There, Done That
If you’ve ever applied for a mortgage before, you’re in luck—applying for a retirement mortgage follows the same procedure. The only difference is that you base your income on the type of retirement income you receive rather than job income. As always, you must meet basic credit and down payment requirements. But wait, we haven’t told you the best news yet: interest rates for retirement mortgages are based on the same factors as regular mortgages, so rates for retirees won’t be any higher!
Retire at The Walk at East Village!
Retirement is about settling down, not stressing out. The Walk is a low-maintenance community where you can kick back, relax, and most importantly, be confident in your home’s financing plan. If you need help navigating the Clayton real estate market and want to learn more about our financing options, contact us today. We look forward to helping guide you in this transition!