How old is too old to buy a house?
New concerns have arisen in the troubled world of home financing. The problem seems to be that people are now being turned away because of their age. Banks are looking for a secure monthly income, no matter what your savings, retirement savings, or cash on hand. If you don’t keep up the monthly flow, you may be out of luck when you apply for a home loan. Financial institutions see this as a no-brainer because they assume you won’t be able to make monthly payments with a decrease in income. While this may be obvious to a banker, many people are surprised by this news.
So can your age really affect your ability to buy a home and deal with some of the strict unwritten rules that some lenders have imposed? Unfortunately yes.
Some people find this out the hard way when they go to their local banks to discuss mortgage possibilities. Even those with the most prestigious financial histories can find it difficult to take advantage of recent low interest rates, no matter how long they’ve owned their home or how many home loans they’ve obtained in the past and paid off. If they now have insufficient income to repay the loan, according to the bank or lenders involved, they will no longer be able to borrow the money.
This obviously makes a lot of sense from a banker’s point of view, however some boomers may not have even dreamed of being denied as their previous records are free of delinquency or foreclosures. It has been happening that it falls to the banker to explain to these superior people that he was not prepared to hear “no” for an answer.
People with excellent credit scores, 401k holdings, checking or savings accounts, and respectable net worth may be denied a home loan simply because they don’t receive enough income from their Social Security or other retirement benefits each month. And this problem seems to be happening more frequently across the country as more retirees try to get a home loan as they always have in the past only to face the shock of not having a substantial income.
If you think you might fall into this category, it may be better to pay for a house outright, if you can, rather than trying to borrow money from a bank.
Even if borrowers are willing to make income adjustments, such as withdrawing funds from their checking or bank deposit accounts and setting them aside to help make up the shortfall in their monthly income, most banks will still refuse to issue a loan. loan. Similar accounts have occurred due to random bank policies that will not allow a person to receive a home loan, not based on their actual income amount or their credit score, but simply due to strict rules set by the bank, such as that the individual does not have an open bank account with them for a sufficiently long period of time.
Fortunately, there is some help for retirees who want to receive a secure home loan. Government-assisted programs like Freddie Mac and Fannie Mae can help these people apply for a loan using income from their IRA accounts or other retirement account balances, not just their Social Security benefits.
It’s a tough market for boomers! The irony of all this is that now that boomers are mature and financially secure, they may be searching for the dream home that they feel they can finally afford. However, it is a perfect storm of age and bad timing in the real estate market if these people are being turned away. Hopefully they still have their savings and maybe the help of friends or family they can trust to help them get the home of their dreams. Good luck!
Copyright (c) 2012 Mid-America Farm Credit Services
