Rightsizing for Retirement: The Golden Years Guide to Applying for Mortgages

Retirement doesn’t have to leave you behind. If you are currently retired or planning to retire in the near future and need mortgage help, listen in as expert and Guaranteed Rate VP David Frankel speaks to us about the logistics of financing a smooth transition into your retirement.

Can someone who is retiring or already retired qualify for a mortgage?

Yes! Our mortgage expert David Frankel spoke to us about the logistics of financing a smooth transition into your golden years. Whether you are upsizing, downsizing or relocating, the mortgage lender will take a look at your current income sources. That doesn’t just mean salary!  Even if you have completed your working years and you have other income coming in, we can work with that.

What sources of income can qualify or help you qualify?

There are lots of, most common social security. We look at what your monthly income. Many people have pensions. If you have an annuity, which is an investment that pays you an annual or monthly installment of income, if you have IRA distributions started or starting once you retire, you may have required minimum distributions depending on the age of the buyer.

How Do You Prepare (especially if you don’t have a “salary” coming in but you have income)

It will be similar requirements but different specifics to applying for a mortgage with consistent employment. Your broker will look at your social security benefit statement that you get once per year, and they will also check out bank statements because that's where you see a monthly distribution or where the annuity from a pension will be deposited

If looking at capital gains, dividends, interest income, potentially you will want to prepare three years of tax returns, because that's where that's gonna be declared.

And if you’re looking at IRA income, a broker will look at statements and they’re gonna need all the pages!

Are there any loans you can’t qualify for?

There are some different requirements, as there’s variation from one mortgage to the next. Guaranteed Rate will talk with clients about how much they want to borrow and what type of loan they will qualify for. But for our jumbo products, even if there is a little extra paperwork, they'll look at retirement income pretty much the same way as Fannie Mae or Freddie Mac.

If you are searching for properties, newly retired and want to get pre-approved for a loan, make sure to look at where your income is starting, has it started, and how it will continue.

If your pension starts in nine months and you are retiring now, that may be too far out to get pre-approved. Severance may not also qualify because it is not classified as an ongoing multi-year permanent income like a pension.

So if you’re liking to “rightsize” in retirement, call up a trusted mortgage broker like David Frankel at (267) 825-7857 or email him and start digging into your finances and getting your paperwork in order!