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2/11/2010 2:09:30 PM
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RDelano
Posts 1
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We are planning on retiring in December of 2010 or June of 2011 when should we start applying for a loan we have contacted some real estate agents in the states that we are looking to retire in and they have been sending us homes the range from #159,000 to $180,000 we will have enough to put down 10-20% on homes in this range. My question is also would is it better to find a place to rent since we are in our 60's and some loaners my not want to loan money to people our age , our retirement income will be about $55,000-$60000 per year. Also we owned a home in the 70's but sold it when I retired from the military and the only debt we have now is a car payment and a installment card with the Military exchange system which is about $700.00 a month total for about 15%percent of our monthly income. Also which income would the bank or mortage company use my present income or my retirement income?
Thank You
Ray
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2/22/2010 9:43:56 AM
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MortgageMarvel
Posts 38
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Lenders are not allowed to discriminate based on age, so you should not be concerned about whether they will lend to someone who is your age. They will, however, ensure that your income is likely to continue at current levels. Given your plan to retire within a year or so, most lenders will base their decision on your retirement income. You will need to be able to document the amount of your retirement income to their satisfaction.
Assuming you can document your retirement income and have good credit, you should not have trouble with your debt-to-income ratio. The principal and interest payment on a 30 year fixed rate for a $160,000 loan would be $858, about 19% of your retirement income. Adding in your current monthly debt of $700 would result in a total debt-to-income ratio of about 34%. This is within acceptable levels for someone with documentable income, good credit, sufficient cash reserves, and a reasonable down payment. Speaking of the down payment, you should, If possible, put down 20% of the purchase price so you can avoid the costly expense of mortgage insurance and the approval requirements of the mortgage insurers.
Any one of the Mortgage Marvel lenders should be able to help you understand your financing options. In fact, many of them will provide an automated underwriting assessment as part of your online application. So, if you qualify, you could get an online preapproval (an approval without knowing what house you are going to buy) that will let you shop for your retirement home with confidence about your financing options.
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