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Life Stages
Different mortgages fit different stages of life. For example, a first-time homebuyer benefits from an FHA mortgage as it has a low down payment threshold and easier underwriting criteria. A move-up buyer may use a Conventional or Conforming loan, that offers higher loan limits. Someone living outside the city benefits from a USDA loan which offers low-interest rates and a zero down payment option. A veteran can use their VA eligibility to get a zero down loan, low-interest rate, and no mortgage insurance premium.
Someone who wants a loan above the conforming loan limit will choose a Jumbo loan. A borrower who wants to pay their home off in the shortest amount of time and pay the least amount of interest will consider the All In One Loan.
So, is there specialized financing for someone on a fixed income in retirement? There is!
Best Mortgage for Seniors
What if there were a mortgage a senior homeowner could qualify for that:
- Had no mandatory monthly mortgage payment
- Unlocked and gave the homeowners access to the equity they have built up over time
- When the borrower accessed that equity by lump sum, monthly installments, or a line of credit, those funds aren’t subject to tax
- Transferred responsibility of repayment from the borrower to the home
Does such a loan exist?
It does!
The types of properties that qualify are:
- Single Family Residences
- Townhomes and Patio Homes
- FHA approved condos (although, now can ask for HUD to approve just a unit in a complex that isn’t FHA approved)
- 2-4 unit residences, as long as the borrower lives in one of the units as their primary residence 6 months or more a year
How does a senior qualify for such a mortgage?
- The residence must be their primary residence for 6 months or more a year
- They must prove they can pay the property taxes, homeowners insurance, maintenance on the home, and any other fees such as an HOA fee.
- Have 60% or more equity
- Prove they have paid their mortgage, property taxes, homeowners insurance, and other home-related fees (i.e. HOA) on time for the past 2 years
When people ask me, “What is the best mortgage in retirement?” I always ask if they have equity and are still making a mortgage payment. If the answer to those two questions is yes, then I recommend they look at a HECM (Home Equity Conversion Mortgage) also known as a Reverse Mortgage. It is specifically designed to benefit seniors as they finance a home in retirement.
If they can do this, the homeowners can remain in their home until age 150! If you would like to see if this is a loan that might help you, let’s chat on the phone.
