Retirees struggle to qualify for mortgages
Retirees’ decreased monthly incomes may make it more difficult for them to meet the stricter underwriting standards that lenders have in place in order to qualify for a mortgage, according to an article in The Washington Post.
Whether refinancing their current mortgage or applying for a new loan to purchase a home for the golden years, more retirees are saying they are increasingly facing roadblocks when it comes to applying for a mortgage.
One 68-year-old home owner, with a net worth in the seven-figure range and an 826 credit score, said he was looking to refinance into today’s record low interest rates and that he was shocked when he was not approved to refinance his mortgage. He told The Washington Post that it was the first time he was rejected in 45 years of home ownership and after having eight different home loans through the years.
The reason more retirees are being turned down: Insufficient income.
If retirees are rejected by lenders for a loan, financial experts say: Don’t lose hope. They say that some loan officers aren’t aware of the various techniques for qualifying retirees who are “asset-rich but income-deficient,” according to The Washington Post.
Even retirees whose income is lower during retirement should still be able to refinance or obtain a new mortgage as long as they have sufficient retirement assets, such as through their IRA or other retirement accounts, experts say. “You just need to shop around and deal with experienced loan officers who know the ropes and are willing to work with you for your business,” The Washington Post notes.
Source: “Mortgage Rules Prove too Strict for Some Retirees,” The Washington Post (May 24, 2012)
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