There are many seniors and retirees who are taking out new home loans. One of the main reasons for this is the low interest rates and tax breaks that have been available lately. There are also many options available for those who are on just a Social Security income. Thanks to the Equal Credit Opportunity Act, lender do not have the ability to deny someone a loan or the opportunity to refinance a house due to age. This act means that anyone, at any age has the same chance to qualify. Seniors, however, may have to prove more than a younger person does. This has to do with providing proof of income – especially if there are various income sources the senior has.
As mentioned earlier, an income from Social Security or even long-term disability, can help a senior qualify for a mortgage. This type of income is not taxable. Since it is not taxable, the qualifying amount can be rounded up by ten to twenty five percent. This is huge! Be sure to ask your lender about other non-taxable income options as well. There are other non-taxable options other than just Social Security.
If a senior is having trouble qualifying for a mortgage, if they add a co-signer to your mortgage application, this can help significantly. This will be especially helpful if the co-signer has a significant income. Fannie Mae has even provided a new loan option specifically for co-signers being involved.
Seniors may also qualify for a property tax break. The rules and qualification of this depend on the state you are applying for a mortgage in. Each state is a little different. Be sure to get with your local tax authority or even financial planner to find this out.
If you need even more ideas for helping a senior in your life qualify for a mortgage, please let us know. There are other options and ideas available that we have not discussed yet.