Are you retired or approaching retirement age and planning to borrow to buy real estate? Discover the essential information on the mortgage for retirees.
Apply for a home loan when you are retired
If it was previously complicated to be granted a loan while you are retired, it is now rarer for retirees or people over 60 to access the mortgage, with long-term financing term. Banking establishments are in fact less reluctant to lend money to seniors because of their quality of life, the financial wealth they have, as well as the increase in life expectancy.
With regard to shorter repayment credits, consumer loan organizations agree to lend to retired people because only small amounts are involved. You should also know that retirees want reassuring loan applicants for banks and financial organizations because they have a certain stability, both in terms of finance and life. They are not exposed to the risk of unemployment and dismissal (logical since they no longer work) and generally have real estate and movable assets. However, this does not mean that getting a real estate loan for retirees is easy!
When simulating a home loan, the retiree should know that the bank will look at his age at the end of the term. And it is rather rare that the repayment of a mortgage does not exceed an age of 80 or 85 years, knowing that a mortgage has a duration spanning an average of 15 years. Young retirees want to be the best candidates for long-term loans.
Apply for loan insurance
What creates the difference between two people applying for a real estate loan for retirees is their state of health, and consequently the cost of mortgage borrower insurance can be as high as the cost of the loan itself. And the more risky the state of health of the borrower, the higher the amount of the premiums.
You should know that the amount of borrower insurance is calculated from the health questionnaire that you complete when you apply for death insurance to guarantee the mortgage for retirees. It is recommended not to hide anything: the medical advisers conscientiously study each file and, in the event of erroneous declaration, you risk losing everything benefits from the insurance.
For an elderly person whose health comes to pose problems but who wishes to borrow, there are certain solutions, under the condition of having an inheritance: the mortgage life loan and the guaranteed mortgage loan.
The mortgage life loan provides access to the bank loan. The sum is lent in the form of an annuity or principal, and the guarantee put in place is a mortgage on real estate.
The guaranteed mortgage loan allows a loan in the form of capital or annuity. The loan cannot exceed 70% of the value of the property placed on the mortgage and can be repaid in monthly installments. It is covered by a double guarantee: the mortgage and the deposit.
You can therefore look for the retirement home loan that suits you best and thus access the loan to make your real estate project a reality. Do not hesitate to contact a broker to get help and to benefit from the best borrowing conditions.