Mortage Loans for Seniors

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READER QUESTION

Will a mortgage company give a new loan to a 60 yr old woman?

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Bills.com Resident Expert
Dec 12, 2011
BILL'S 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 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.

Comments (2)


Avatar
Bills.com
January 08, 2009
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.
Avatar
Morgan D.
January 08, 2009
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
Thanks for your feedback!

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