The Top 4 Mortgage Tips for Retirees
Realtypin.com Author: James Paffrath
June 14, 2013
You’ve saved all of your life. You have money in stocks and savings, and
you spend your Social Security checks wisely. You have a perfect credit score
and plenty of money for the down payment.
So you should have no problems getting a mortgage, right?
Not exactly!
Many retirees are discovering that although they have the money and the
credit score to get a loan, they are being turned down – or that the process is
much longer and complicated than they thought it would be.
What gives?
Banks like to see a solid monthly income when they lend out money for a new
home. Unfortunately, although the money you have in your savings accounts could
be amortized to be higher than the income necessary, banks don’t always look at
your finances that way, which makes it complicated. Even if you have more than
enough monthly income to handle your mortgage, banks may see you as risky.
So, what do you do if you want to buy a new home?
Check out our top 4 mortgage tips for retirees:
1. Know what to expect
Unfortunately, you can’t assume that your credit and savings alone will get
your approved for a loan. Obviously, those things are a good start, but banks
need to see a regular income in other forms to ensure that you will be able to
keep up on payments. For example, a bank will want to see dividends from stocks
on top of your Social Security. Even if you have a part time job, the bank is
going to want to see longevity in your job to ensure that any additional income
is steady.
2. Analyze your finances
Once you retire, your income tends to be fixed. So if you are considering a
new mortgage, it’s important to sit down and really analyze how much you can
afford, and how much income you can rely on in the next few years. By
understanding the ins and outs of your financial situation, you can paint a
detailed picture for your lender – which will hopefully make the process
smoother! Because it’s harder for a retiree to get a mortgage, if you have the
money to pay cash, you may save yourself a few headaches to just avoid the
process all together. Even if you can’t do an all-cash transaction, the more
cash you have to put down, the better.
3. Shop around
Once you know what to expect and you have analyzed your finances, it’s time
to start shopping around to see what different lenders have to offer. Even with
good credit and a stable monthly income, it may take you a little longer to find
a lender who is willing to provide a mortgage to a retiree, so it’s important to
take that into consideration when shopping for a loan.
4. Start early
Start the mortgage process at least six months in advance before you want
to move into a new home. That may seem excessive, but it can easily take that
long from start to finish. Once you go through your credit score with a
fine-toothed comb and analyze the rest of your finances, you’ll need to get
pre-qualified.
Once you jump over all of these hurdles, you’ll be able to pound the
pavement and start searching for a new house to spend your Golden Years in, or
even just a new home to vacation in. As soon as you kick up your heels in your
new place, you’ll realize all of the hard work was worth it!
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