Is It Possible to Get an FHA Mortgage As a Senior Citizen?
The Equal Credit Opportunity Act unmistakably states that it is illegal to decline loan applicants because of age. However, you can be denied a Federal Housing Administration mortgage if you do not qualify financially for the loan. The following are general considerations that can have an impact on the approval or rejection of your FHA loan application as a senior citizen:
If the bank or mortgage company thinks your income is not enough, you could be denied the loan. Same is true for your credit score: too low could mean a rejection. A FICO score 740 or above should be fine. If it’s below 640, you may get a mortgage but at a higher interest rate. Your debt should be below 43% of your gross monthly income, but generally, your budget and personal finances will ultimately determine whether or not you can afford the mortgage. Compute your own figures using an FHA mortgage calculator.
Normally, you would have to spend several thousand dollars in down payment for a mortgage, probably from your current home’s sale. If you have no property to sell, or if you won’t make enough cash on the sale for the down payment, you may borrow from your savings, but that will decrease your current retirement income. Try computing using an FHA mortgage calculator.
If you are presently mortgage free, you may be cautious about having to make house payments again. The idea of getting a mortgage late in life is made even more complex by the definition of the word, “mortgage” itself – that it is loaded with interest. You could barely cut the principal over the first few years. Should you sell the house in the future, you may only make a tiny profit, if you can even regain your original investment that is. It’s always smart to be aware of your own figures, thanks to your handy FHA mortgage calculator.
Years of Stay
You may take out a new mortgage or refinance for lower interest. Or you may just sell your existing property to downsize for more convenient upkeep. Both are good reasons to apply for a mortgage when you’re a senior. Note though that the advantage is only as good as how long you keep the mortgage. If you sell a recently purchased or refinanced home, you could end up spending more than staying put, not just financially but even physically. It’s no contest – run some calculations on your FHA mortgage calculator to help you come up with a wise decision.
Deciding whether to get a mortgage can also be affected by what happens to your income if your spouse dies (as surviving spouse, your net cash flow will probably be reduced). Other factors related to income can include the size of your credit and whether you use part of your current home’s sale or mortgage refinance to pay off such debt. Another way your FHA mortgage calculator comes in handy.
Finally, with the right planning, estate issues can be avoided even if you passed away before you could pay off the mortgage. This means your heirs will not have to go through the devastating experience of seeing your home foreclosed.
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