Regardless if you are just entering your adulthood or a step away from retirement, you should start thinking about your future plans on time! Mortgages can be tricky, especially when you retire – some people never end up getting a place of their own, or they wait till they retire to settle down. But so many things play into it, income, already owned property, credit, even your retirement plan can cause changes to your decision. Either way, there are plenty of options to choose from, you just have to make a suitable decision for yourself! So here are 6 types of mortgage options you have when you retire!
1. Reverse mortgages
Just like the name suggests, a reverse mortgage works by allowing senior citizens who already own homes, to tap into their value and use it to their advantage. This is different from a traditional mortgage in the sense that it gives you the opportunity to tap into your home’s equity without the additional monthly payments you would usually do. Over time, the value decreases while the amount owed on the house gets higher. This particular loan type isn’t for everyone, it’s particularly for citizens who are above the age of 62, and even then it’s not the perfect pick for everyone! So you should consider this one, do lots of research and truly see the benefits and possible cons that this might bring. Choosing a mortgage is not a little thing, especially once you retire so your pick should be something suitable for your needs!
2. Mortgages for seniors on Social Security
People who are dealing with long-term disabilities or those who are reaching their retirement need to consider what’s the best mortgage solution for them. Many people are under Social Security for various reasons, but a lot of people have no idea that they can refinance their social security income and get the settlement for a mortgage. The important thing to note is that in order to calculate the amount that you’ll get from social security, you can also add other liquid assets to the mix and see the amount of money you are working with. Then you can see if you are eligible for a mortgage, and what amount suits your situation the best! The accent should be on getting the right proof and all the needed documentation that you are in fact receiving help from social security!
3. Asset depletion loans
Since there isn’t a universal kind of retirement plan, it’s only natural that there would be different kinds of mortgages to suit different kinds of people! So if you are struggling with choosing the right one, or have concerns due to your inconsistent income, asset depletion loans can solve your problems! There are multiple sources of income that can be an alternative to a regular income, like money market accounts, savings accounts, stocks, bonds, and such – this means that you can easily qualify for a home, even if you only have liquid assets rather than a regular income. The amount you have saved up will be divided and spread over time, so you can pay off your monthly loan and see if you are suitable for a mortgage and how much can you actually cover over time!
4. Retirement Interest Only Mortgages
If a traditional mortgage plan is just not working for you, there are other options to choose from that can easily replace it! As largemortgageloans.com suggests, RIO Mortgage is suitable for those who are older than 55 years old and searching for the perfect mortgage solution after their retirement. What truly sets this kind of mortgage apart is the fact that you can actually repurpose your already existing mortgage or property and repay the interest in the chosen time. This makes sense because an RIO mortgage means that it’s an interest-only kind of mortgage! So all in all, if you choose this kind of mortgage, you will be paying off your interest by repayments each month! The ideal time to start thinking about this mortgage is around 55 till 70, as it’s the ideal time to get this kind of mortgage!
5. 30-Year Fixed Mortgage
The longer the time period, the higher the loan – it’s completely normal to want a blogger, better house but you need to consider other factors that come with it as well. Apart from bad credit, there are other things that can influence the mortgage you end up choosing, your monthly income is definitely one of them! A 30 year fixed mortgage means that you will pay off your loan in exactly 30 years, obviously if you pay your monthly fees on time. A rather tricky mortgage option if you are well in your old age, it should be considered only if you know you can carry out the payment plan! On the other hand, the good thing about a 30 year fixed mortgage is the fact that the rates never change, and you pay less money over the longer duration of time! Perfect for those who would like to upgrade to a better home, but still have financial limitations!
6. 15-Year Fixed Mortgage
Another popular mortgage type is the 15 years fixed mortgage, just like the name suggests it means that you have a set rate and fees that are going to be fulfilled after 15 years! This is a great option for those who are freshly retired and looking to get a new home. Depending on the monthly income, you should take into consideration that this type of mortgage will cost you a bit more monthly, at least more than what you should pay if you got a 30 year fixed mortgage. So make sure that your monthly income can cover it!
At the end of the day, many things go into choosing the right mortgage, your age, income, well-being, credit – all of those things can actually make a big change in your decision. Now that doesn’t mean you should settle for the first thing that you come across, doing lots of research and consulting is the best option – making the right decision as soon as possible is your best bet! So don’t give up and find something that is most suitable for you and your needs!