Your One Stop Resource for Saving Money.
Mortage Loans for Seniors - The Bills.com Blog
Bills.com Blog > Mortgage Questions > Mortage Loans for Seniors
Mortage Loans for Seniors
Friday, Jun 8, 2007
Question: I turned 60 this year. I am single, live alone, own a home that was purchased 6 years ago after a divorce. I have a nice job making approx. $47,000. I want to move and buy another house but don't know if that is wise at this time or if i should wait until I am ready to retire (maybe 6 or 7 years?). Will a mortgage company give a new loan to a 60 yr old woman? I owe less than $100,000 on this house. It's a two story and I want a ranch style and downsize as well. I wish to know what the best way to go financially.
Answer: Typically, there are several considerations when getting a loan - three of the most important are: i) your loan-to-value; ii) your debt-to-income ratio; and iii) your credit rating.I will review each one in turn, focusing on your specific situation.
1. Loan to value: This is calculation looking at how much you want to borrow, relative to the value of the home. It is directly impacted by the amount of money that you can put down on your new home. Fortunately, it appears that
you will be able to make some good money on selling your current home (it has probably appreciated over the past 6 years, and you have paid down the loan)... which can be rolled over into a nice down payment.
2. Debt to Income: This ratio looks at your monthly debt obligations (payments of interest and principal) as a percentage of your monthly income. If you are considering retiring in the future, your income will likely decrease... which means that you may want to apply for your new loan while you still have a strong and steady income.
3. Credit Rating: Your loan, including terms like interest rate and points, will depend on your credit worthiness. One measure of credit quality
2. Debt to Income: This ratio looks at your monthly debt obligations (payments of interest and principal) as a percentage of your monthly income. If you are considering retiring in the future, your income will likely decrease... which means that you may want to apply for your new loan while you still have a strong and steady income.
3. Credit Rating: Your loan, including terms like interest rate and points, will depend on your credit worthiness. One measure of credit quality
is a credit score (sometimes a specific 'FICO' score). Your credit rating is calculated based on several variables, including: your payment history (do you have any late payments, charge-offs, etc.), the amount and type of debt that you owe, if you have maxed out any of your trade lines, and then several other secondary factors like the length of your credit history and how many recent inquiries have been made to look at your credit history. If you have a good credit score, you will get a better loan.
I hope that his helps you make the right decision for your particular situation, but it may benefit you to look into buying the new home and getting the new loan, before you retire.
I hope that his helps you make the right decision for your particular situation, but it may benefit you to look into buying the new home and getting the new loan, before you retire.
Also, make sure to get a free financial health check-up with Bills IQ!
User Comments
Submit questions/comments about this post:
Bill has answered all sorts of questions and has been able to provide those in need of financial guidance with helpful and valuable advice and information on their specific financial area of interest. If you need specific guidance on any of the above mentioned financial areas, feel free to Ask Bill your financial questions and get better informed. Also, make sure to get a free financial health check-up with Bills IQ!
Information provided by Bills.com is for general informational purposes only and is not be
construed as legal, financial, bankruptcy, tax or other professional advice. Should you
require more detailed information or specific professional advice tailored to your situation you
should consult an attorney, financial planner or tax advisor.
While we believe all information provided by Bills.com to be accurate as of the date of its posting, we cannot ensure its accuracy. Use of this site and any information contained on or provided through this site is provided without any representations, warranties or guarantees. Bills.com is not responsible or liable for any decisions or actions anyone may take based on the information provided. Please see Terms of Use.
While we believe all information provided by Bills.com to be accurate as of the date of its posting, we cannot ensure its accuracy. Use of this site and any information contained on or provided through this site is provided without any representations, warranties or guarantees. Bills.com is not responsible or liable for any decisions or actions anyone may take based on the information provided. Please see Terms of Use.
© 2006 - 2009Bills.com LLC. All Rights Reserved.
1. Posted by Morgan Davis on Thursday 8th January 2009 15:40
Hi, I 'm trying to find so help for my grandmother she just lost her husband only 2 years ago in march and she's trying to raise us(me, my sister, and My brother), her mortage is starting to get harder and harder to pay. I work as much as I can at the Local Midle School, to try tko help but I can't seam to give her enogh to help pay all of the bills, she is 62 and as a varite of health probles, please any advice would be helpful, thank you for lyour time, Morgan Davis
2. Posted by Bill on Thursday 8th January 2009 17:59
Your only option is try to work out a loan modification or restructuring of the loan. Be open about your situation with your lender. With the current mortgage scenario, I am sure the lenders will not want to force a foreclosure on your grandmother as that will mean losses for them as well.