Upon entering retirement, you may wish to purchase a new home or piece of property. Home loans for seniors may seem unattainable at first glance. With the proper knowledge, you can take out a home loan at any time in your life.
Senior citizens may want a new home for many reasons, including:
- Downsizing from a larger home
- Indulging in a dream house
- Purchasing a vacation home
- Relocating to a new city or state
Types of Mortgages for Seniors
Choose from some of these popular options for purchasing property or using current home equity for a loan.
1. Asset Depletion Loan
Seniors enjoying retirement can purchase a home with an asset depletion loan. Instead of using regular income sources like an employer’s paycheck or self-employed revenue, the bank looks at your liquid assets.
Examples of liquid assets include:
- Retirement accounts
- Checking and savings accounts
- Stocks and bonds
- Money market accounts
You’ll need significant liquid assets to qualify. Providing the proper documentation helps you secure an asset depletion loan.
2. Conventional Home Loans
Mortgage powerhouses like Fannie Mae and Freddie Mac provide home loan options for seniors living on their retirement accounts. You’ll need to prove that you have a large enough budget to regularly make your house payments, especially if you choose an adjustable mortgage interest rate. Most conventional loans require at least a 20% down payment.
3. Home Equity Loan
If you want a loan that pays out in a lump sum, a home equity loan provides that structure with fixed monthly payments, a fixed interest rate, and terms ranging from five to 30 years. To qualify for a home equity loan, you’ll need to have paid at least 20% of your current mortgage.
4. Home Equity Conversion Mortgage
This federally insured reverse mortgage requires you to meet with a certified HECM counselor to ensure you meet the necessary conditions. Besides proving you have no other mortgage on your property, you must:
- Be at least 62 years old
- Use the property as your primary residence
- Prove your ability to pay property taxes, HOA fees, and other home-related expenses
5. Cash-Out Refinance
For seniors wishing to take advantage of the equity in their home, a cash-out refinance is a great option among home loans for seniors. Your mortgage renews, sometimes with a lower interest rate and shorter payment term. You’ll then receive a check for your home’s equity.
Professional Guidance on Senior Home Loans in Cape Coral, FL
Do you qualify as a senior citizen and wish to purchase a new home? Cape Coral Mortgage provides many options and experienced assistance in procuring home loans for seniors. Our team of professional mortgage brokers can help you purchase or refinance your home through conventional, FHA, or VA loans.
Whether you’ve never owned a home before, want to downsize, or wish to move to Cape Coral, we’ll help you find and own your dream home. Call (239) 540-5555 to learn about mortgages for seniors with Cape Coral Mortgage.