Are you a senior citizen? Do you want to get a home loan? More 55+ people are getting new home loans, and are no longer interested in paying off their homes. More and more senior citizens want to enjoy the low-interest rates that mortgage offers. They are not willing to pay off a huge chunk of balance, rather than opting for refinancing. Therefore, no worries, there is a wide range of mortgage financing options for people 55+.
If you have resources, age does not matter to refinance a house. There is an Equal Credit Opportunity Act, removing the blockade of not getting a loan based on the age group. If you are eligible for you, a person 30 years old and a person 60 years old have the same chances to qualify for a mortgage loan. The criteria of qualifying will still depend upon your assets, income, credit, and debts. However, it might become difficult to qualify for income criteria if you are retired.
As a senior citizen, you might have to face stricter documentation and scrutiny of the documents. You will have to provide various other supporting documents showing your means of income for example pension, social security, etc.
You may have to go through various steps, but if you have enough cash to pay your installments, you will qualify to get the new loan or refinance your current place.
The income that you get from social security for your retirement can be used for qualifying for a mortgage loan. When you need to refinance your mortgage, your social security income can also be used. The SSI is calculated along with your liquid assets and retirements funds to count the income necessary for qualifying for a loan. However, SSI is not taxable, so the bank may increase the amount by 10-20% helping you to qualify for a large mortgage loan monthly payment. Proof of the latest receipt or SSA award letter might be needed to show if you want your SSI to be counted for your mortgage loan.
Available options for senior citizens
Following are some of the options available for you as a senior citizen that you can apply for. Many banks/lenders offer special programs for senior citizens to refinance or get a mortgage loan.
- Asset depletion loans – A type of loan offering mortgage for buying or refinancing a home if you do not have a regular income. Asset depletion loan is similar to a traditional mortgage, the only difference is in terms of calculation of your qualifying income by the lender. You can qualify for this loan by showing your liquid assets in place of a regular income. The assets are divided as monthly income to calculate your ability to pay a monthly instalment.
- Investment money – If you own investment funds, it can also be used for getting a mortgage loan. However, the complete amount of assets might not be calculated. If your retirement account has mutual funds, bonds or stocks, 70% of the total amount will be calculated by the lender to determine whether you qualify for it or not.
- A co-signer – As a senior citizen, one of the easiest ways to get a loan is to add a co-signer.A co-signer with a substantial income can help you out in getting the loan. A co-signer can even be your child.
No matter wherever the type of loan you choose, it is better to do some research and go for an experienced lender, who deals with loaning for senior citizens as well.