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Your age does not matter ever to a mortgage lender.
What does matter is your ability to qualify for a loan. Lenders look at your actual income, not so much your other financial assets. Many retirees have high assets, primarily in a paid off home, but may not have as much yearly income as they used to have. The lender is primarily concerned with your yearly income.
You have to do some research on how you want to approach this second home. A lender will look at it as a vacation home or as an investment property. Qualifying and rates will vary depending on which approach you use.
In your situation you're probably better off buying now, while you're working full time.
You would simply have to qualify for the loan; they can not discriminate based on age. Its a contract so disclose that it will be rental for future home for yourself. Be sure to investigate what a non-primary residence means tax wise also.
from what i have read morgages in retirement can be tricky . the banks need to see cash flow established and no matter what you have in assets they don't want just random pulling from assets.
some have said they were forced to file for social security even though they wanted to delay.
That was my situation. I had an income based solely on dividends so I had to start taking social security. I was actually surprised that my dividends plus social security qualified me for a loan to cover a mortgage on a house that was about ten times my annual income. I would not say that counts as being "tricky." I did have to make a 20% down payment in order to qualify. And for a better rate I decided on 30% but the loan officer told me that was not necessary.
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
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Quote:
Originally Posted by andy1918
Thanks all for your views. I feel emboldened to apply for a mortgage now.
I just got a second home mortgage last month (3.4%). It will provide access to capital for 3 more investment properties. (resultant positive cash flow of $3000+/ month) The payments are $800/ month.
Since there are 2 homes and 2 RV sites on the second home property, "parts" of it will be rented out (additional cash flows beyond the $3k). but will retain 'second-home' status on at least one of the homes to stay in compliance with Mortgage Rules.
The 'additional' Stuff you need to do when HC and property taxes each increase 1000% since retirement (pre-age 50)
(no pension / no HC)
Last edited by StealthRabbit; 02-11-2015 at 11:39 PM..
With good credit, verified steady income, good income/debt ratio you can get a mortgage at age 85 if you want to. By law they cannot discriminate on the basis of age, even knowing that most people won't make it to age 115 to pay off a 30 year loan. My parents bought at age 72/73 with no problem.
Interesting information. Do you know if they require a larger down payment because of this? If I were a lender, I don't see how I can justify extending a 30-year mortgage to someone that I know can only work for another few years. Sounds like too much default risk...
We have a mortgage on our primary residence and purchased a rental property in Seattle 2.5 years ago. Age was never an issue although as mentioned in this thread the loan was a bit more scrutinized since we would use it as a rental until we retire in a few years.
The most difficult part for us was coming up with the required 25% down plus closing. Good credit and debt ratio although they still wanted 25%. There was a renter in the unit when we purchased it and the bank wanted a copy of the lease. Not sure it would have made a difference in the loan being approved but it was just added weight towards approval.
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
34,705 posts, read 58,031,425 times
Reputation: 46172
Quote:
Originally Posted by AmFest
Interesting information. Do you know if they require a larger down payment because of this? If I were a lender, I don't see how I can justify extending a 30-year mortgage to someone that I know can only work for another few years. Sounds like too much default risk...
My mom got a new 30 yr mortgage on a home at age 82 *(she hadn't worked for 30+ yrs).
She the took the cash and flipped another 'senior fixer' home in 3 months and made a healthy profit off the mortgage loan proceeds.
She has done very well on 'senior fixers'. (view / golf course homes in 55+ communities that get sold by heirs who don't want to fix it themselves.). She did several condos and homes in Lake Havasu City about 15 yrs ago., then Cedar City, Bullhead City, Vegas, and 3 in Las Cruces, NM. She had previously done 3 mtn homes in Colorado, but could no longer handle the 7,000 ft+ altitude after age 70.
Interesting information. Do you know if they require a larger down payment because of this? If I were a lender, I don't see how I can justify extending a 30-year mortgage to someone that I know can only work for another few years. Sounds like too much default risk...
Not actually by history younger people working are bigger risk to go under water. Older people have much more wealth generally and the income is more stable than a job.
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