Which Mortgage is Best in Retirement?

With so many options for home financing, it’s important to be educated and know what will work best for your situation when looking for which mortgage is best in retirement?.

Seniors living on a fixed income in retirement often enter retirement with a mortgage. Mortgages have different purposes at different stages of one’s life. For example, first time home buyers may choose a FHA mortgage because of the low down payment, more lenient credit requirements, job history and it’s
easier to qualify for. Veterans and military personnel utilize their VA eligibility and opt for a VA loan.
As home owners get more established in their careers, get married, start a family, they often need more
space. They will buy a larger home and go with a Conventional home loan, putting 5-20% down. At this
point they have stronger credit, more income and assets and can able to qualify for this type of
mortgage.

Choosing a Loan for Your Stage of Life

Once the children reach the teenage years, there is another move families make which is to a ‘legacy
home’ where a jumbo loan may be the best option. Or, disciplined borrowers may utilize the “All in One
Loan” which helps them pay off their home in the shortest amount of time and paying the least amount
in interest. So, each loan has a purpose for the stage of life a person is in.

What is the best type of mortgage for someone in retirement?

The Home Equity Conversion Mortgage or HECM is hands down the best option. Why is this?

- - - - no payment is required, which provides financial flexibility
        
        the house is responsible for repayment and not the borrower
        
        there is no pre payment penalty
        
        homeowners remain on title
        
        seniors can maintain their independence