Financial institutions offering mortgages look into things like age, income, and credit history to identify eligible borrowers. This has in most cases been the reason why many retired individuals have been unable to access mortgage loans. At retirement, one is usually advanced in age and have no income attached to them.
However, with time, this has started to change. Lenders now are able to look at an individual’s IRA and 401K and the retirement account as income. This however has not been free of any restrictions. It is only in cases where one does not use the funds mentioned or their dividends for their current income that they can be considered.
This facility varies from one place to another and also depending on the mortgage issuer. The assets and the funds under consideration vary in amount depending on the mortgage issuer. Something that all the mortgage issuer share is that depending on their terms, the amount and age of an individual have an influence on the mortgage one can get. This rule is put in place to ensure that borrowers take up on mortgages that they are able to accommodate comfortably.
Not to be ignored are matters of previous economic crisis that have hit and had an impacts on the retirement savings that individuals had. This led to the need to find homes regions where houses are up for sale at lower than the average costs. This has helped those moving to retirement or those already in retirement find homes whose payment they can meet.
Retirement mortgage does not only work for those who have homes. It also applies to those who had bigger homes before but have the need to settle in smaller and manageable homes. For such, the best road to take is in first selling the current home to generate liquid cash. With good advice from an investment adviser and a tax expert, one can make good decisions as to how much of the cash will be spent and how much of the new purchase should be financed.