Nest in a New Home

Recent rule changes have made it easier for retired borrowers to qualify for a mortgage loan. Borrowing from mortgage lenders used to be fairly difficult for retirees due to lack of income.

Now, lenders can look at your IRA and 401(k) and lump-sum retirement account distributions as income. However, the money can only be counted if you aren’t currently using the assets for income.

If you haven’t retired yet, you also can apply for a loan before you retire so that your lender’s decision will be based on your working income.

Many people are hesitant to have a mortgage in their retirement—worrying about whether their retirement savings will last. In recent years, however, the amount of homeowners 70 and older with a mortgage to pay off has increased to 30%.

Creating a budget that will account for unexpected expenses is important as you plan for a mortgage in your retirement. You must have enough wiggle room in your savings so that you can meet monthly payments, even if medical emergencies arise. You should also plan for inflation and property tax increases.

If you decide to take the plunge, consult an investment adviser, a tax expert, and a lender to decide how to finance your new home. Wendy Bussa, Hopewell’s mortgage loan expert, can also provide you with the financial tools you need as you nest in a new home.


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