Can You Get A New Mortgage Loan When You’re Retired?

So many aspects of the previous generation’s American Dream are out of reach for the members of Generation X, who are quickly approaching retirement age.  In the old days, if you were financially stable, but not necessarily wealthy, then you could pay off your mortgage over 30 years and then spend your retirement living in a paid off home.  If you were upper middle class, you could sell your home and use the proceeds, plus some of your cash savings, to buy a house or condo in Florida, and if you were rich, you could continue to maintain your paid off home up north and buy a second home in Florida, where you could spend the winters.  These days, sexagenarians are more likely to be able to afford real estate purchases than younger folks are, but almost no one can afford the entire purchase price of a house in cash.  If you want to buy a new house where you will spend your retirement, you will need a mortgage, which is a scary thought.  For help envisioning a retirement that involves a monthly mortgage payment, and seeing if that is what you want, contact an Orlando estate planning lawyer.

Home Buying Considerations for Seniors

Your age alone does not make you ineligible for a mortgage, although it might be one of the biggest reasons that you hesitate.  A mortgage has a fixed term, and you don’t have to be especially mathematically inclined to think about how old you will be when the mortgage loan matures.  If you buy a house when you are 30, and you take out a 30-year mortgage, then you will be 60 when it is paid off.  If you take out a 30-year mortgage loan when you are 65, that is less pleasant to think about.  It stands to reason that seniors should choose a 15-year mortgage, so that there will be less mortgage debt, if any, to fight about during probate.

Yes, a shorter repayment term for the mortgage loan means higher monthly payments, but seniors tend to borrow less on their mortgage than younger people do.  If you are close to retirement age, you have the proceeds of the sale of your previous home to use as a down payment, and you can also take money from your savings account, if necessary.  If you place a big enough down payment, the chances are greater that your income will be enough to afford the monthly payments.  If the loan amount is small enough, you can afford your mortgage payment solely on your Social Security income and the distributions from your retirement accounts.

Contact Gierach and Gierach About Estate Planning and Homeownership

An estate planning lawyer can help you craft your estate plan so that you can afford to buy a house in Florida when you retire, even if that means taking out a new mortgage loan.  Contact Gierach and Gierach, P.A. in Orlando, Florida to discuss your case.

Source:

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