Should Older People Take out Mortgages?

After the age of 50, buying a home might seem strange. Some older people balk at the idea of taking on a mortgage loan at such a late stage in life. However, there are many older people who are doing just that. If you are considering taking out a mortgage and you are 50 or older, here are the questions you should ask.  

Should You Take out a Mortgage?

There are several reasons why older people take out mortgages. For instance, some people do it to downsize to a smaller home. Others might choose to buy a second home for vacations.  

Regardless of your reasoning for wanting a new mortgage, whether or not you can actually afford taking it on is the top priority. Qualifying for the mortgage loan does not necessarily mean that you should sign on the line.  

It is important to remember that, if you are nearing retirement, your financial situation could change. If you are going to be living on a fixed income, you have to consider whether or not you will still be able to afford the mortgage after you stop working. Remember, you also have to factor in insurance, taxes, and the cost of maintaining your home. 

Consult with a financial planner to get a clearer picture of your financial future. He or she can factor in the mortgage and help determine if it will be a smart move.  

Will You Qualify?

Although the qualification standards for a mortgage loan can vary from lender to lender, there are some basics you need to consider before applying. One of the most important is proving that you can afford the home. If you are still in the workforce, you can rely on your earnings to prove you can make your payments.  

However, if you are already retired and receiving benefits, such as Social Security, your benefits could be enough to meet the requirements sets by the lender. Remember to also include income you have from other sources, such as rental property and pension payments.  

If you do qualify, you have to pay close attention to your estate planning. If you die before the loan is repaid, your estate will be responsible for remaining debt. This could mean your family will be left paying off the loan or the lender could take repossession of the home and sell it to cover the remaining debt. 

Consult with a lender or private broker like Mortgage Broker - Alex Vinarski to ask questions before making your final decision. You can learn more about your repayment options and get a better idea if this is the right move for you.