For those applicants over the age of 50, securing a mortgage can often be a difficult process.
The mortgage and financing industry has not caught up to the advancements made in the medical fields – people are generally healthier, living longer, and working well past the traditional retirement age, which means they are earning more throughout their lifetime.
Although securing a mortgage over the age of 50 is possible, finding a deal that fits both your lifestyle and your budget can sometimes be difficult.
Some Sample Deals:
What Mortgage Companies Consider for Applicants Over 50
The medical information that suggests that people are living longer and earning more has prompted many mortgage companies to begin catering to this specific market. There is the potential for companies to earn more by working with individuals over 50 and there are a number of reasons why someone in this age group would want to secure a mortgage.
For some, it may be their first opportunity to own their own home or maybe they want to restructure their current mortgage – whatever the reason, mortgage companies generally ask applicant’s the question, “why now?”
While knowing why the applicant is interested in a mortgage is important, brokers will also need to know whether or not they can afford it. Applicants who are still in the workforce will have to be able to provide proof of their annual income so the broker can determine if they qualify for a mortgage.
On the other hand, if the applicant is retired, he or she will have to provide documentation stating that he or she the funding needed to make monthly payments in the form of savings, investments, or pension payments.
Even though individuals are living longer, it is important for mortgage brokers to be able to determine whether the applicant will live long enough to pay off what is owed. Many mortgage companies will have a maximum age limit in which they will accept new mortgages.
If the applicant is a good candidate for a mortgage, but age may prevent him or her from paying off the full amount, a broker may ask him or her to appoint someone who would then be responsible for payments after death.
What Mortgage Options are Available for Those Over 50
There are many different types of mortgages out there, so it is important for individuals to really think about what they need and want in their mortgage before beginning to compare different offers.
There are some important questions applicants should be asking themselves when it comes to choosing a mortgage – what loan to value are they comfortable with on their current property, how much funding are they looking for and what initial interest rate fits best into their current budget?
Answering these questions will help to narrow down the many choices in mortgage options that are available out there.
In addition to these questions, applicants should also be considering what monthly payments they are comfortable with. There are two options when it comes to payments – fixed rate or variable rate payments. Fixed rate payments are the same every month and are much easier to work into an existing budget.
Variable rate payments vary from one month to the next depending on the current interest rates – sometimes this works in the applicant’s favor and sometimes is causes payments to be very high.
Comparing Mortgage Offers
Once the needs and wants of the mortgage have been determined, it is always very important to make sure applicants compare multiple mortgage options from many different companies. No mortgage company is the same and the offers these companies are able to make to applicants will vary immensely, even if the overall structure of the mortgage is the same.