We get this question often, so I thought I would provide some current information to all of our readers.
The answer is “Absolutely you can get a mortgage”. How large a mortgage will depend on your retirement income and other expenses, but you can still get a mortgage when you are retired.
Our parents always had a plan to retire mortgage free. For many Baby Boomers however, taking a small mortgage might make sense. When I did some research on the Internet, I found this article published in The Wall Street Journal about 10 days ago –
Conventional wisdom says homeowners should pay off their home loans before retirement. But for some affluent seniors, a mortgage may be a better financial decision.
With interest rates so low, Jorge Padilla, a financial adviser with Miami-based Lubitz Financial Group, often tells clients to consider refinancing a jumbo loan to get the lowest possible rate and keep their savings in investments, where their money may earn a higher return.
Upon further research, I found a different take on the subject in the NY Times –
Retirees trying to obtain a mortgage may find that a pristine credit history and healthy retirement accounts are not enough. Lenders are also looking for a consistent monthly income in line with their usual debt-to-income standards.
So, if you have approximately $200,000 cash and fall in love with a home selling for $275,000, do I think you can get a small mortgage? With good credit and enough retirement income to qualify, I think the chances are excellent. To find out for sure, I suggest you talk to Gail Alm, the mortgage professional that we highly recommend to our clients. Understand, we do not get any kind of kickback from any of the people we recommend. We recommend them because they do a great job for our clients and get them to the settlement table on time.