How To Get a Mortgage When You Are Retired

Once you decide to stop working and retire, you may think getting a mortgage to purchase a new home is something that isn’t possible. While it may be more difficult to qualify for a home loan as a retiree, it is still feasible in many situations. Here are tips to help seniors shopping for mortgages to purchase a new home.

Include All Household Income

Retired people with lower monthly incomes from pensions and Social Security may still be able to qualify for a home loan if they count all of their household income. Today, more adult children, the millennial generation, have opted to move back home with their parents in order to cut costs. If you have an adult child still living with you, it’s possible to include your child’s monthly income on your mortgage application, making your financial portfolio more attractive to lenders.

Get a Part-Time Job

Another way to help qualify for a home loan as a retiree is to add part-time income to your household. Retired professionals can opt to work limited hours as a consultant or in another field to help with their monthly expenses. This income can be part of your mortgage application.

Move to Florida

There’s a reason so many retirees choose Florida as their home. Florida appeals to seniors because of the low tax rates for retirees and income from Social Security and pensions. Paying lower taxes may make your money go a little further and allow you to qualify for the home of your dreams in one of Florida’s many planned communities from developers like Roger Osteen Jaconsville.

Qualify Using Gross Income  

Additionally, lenders may help retired individuals qualify for a mortgage by calculating their retirement income and increasing its power due to its nontaxable status. Retirees collecting monthly payments from retirement accounts, Social Security, or pensions can make their money stretch more because much of that income isn’t taxed. Lenders are allowed to increase the value of this income by up to 25 percent for mortgage applications. Income from these sources must be consistent and must not be near depletion at the time of the mortgage application.

Use a Reverse Mortgage

Another option for some seniors looking to buy a new home is to consider applying for a reverse mortgage. Often, seniors wanting to relocate to a beautiful new community from real estate planners like Roger Osteen Parc Group Jacksonville have to first sell their current home. They can use the equity from their previous property to help finance the purchase of a new home. It’s also possible to take the equity and use it to qualify for a reverse mortgage, which could help cover the costs of the new home’s monthly payment.

Consider Your Spouse

Next, be sure to consider both you and your spouse’s health and income before committing to a new home purchase. If one spouse passes away, there should be enough income and money put away for the surviving spouse to continue paying the mortgage. If the spouse who passed away was the sole name on the mortgage, there are additional issues to work out. The best way to prepare for this is to have basic life insurance policies in case of tragedy.

Watch Out for Age Discrimination

Finally, it’s also important to watch out for potential age discrimination from lenders due to your retired status. Even though your income situation may be a little different than someone still working, you still should get an equal opportunity to apply for a mortgage and qualify. Age should never be a factor in a mortgage application.

If you’re eyeing your dream home and you’re retired, make it happen by using some of these tips to qualify for a mortgage. Retirees who want to relocate, downsize, or simply move into a nicer place can find the right lender for a home loan.