This can make things difficult, especially for borrowers whose assets are in retirement vehicles that may be subject to withdrawal penalties. While there is no maximum age for applying for a mortgage, you may find it is tougher to qualify for certain mortgage products. Buying a house has been a traditional part of the American Dream that makes it very attractive to retirees or those nearing retirement. If you own your home, you will also have more flexibility to customize your living environment. We don’t know how long we will live and what will happen to the cost of living in the future.

But the decision should never be made without taking a cold hard practical look at your financial portfolio. According to the 2017 NAR Homebuying Report, almost a quarter of first time home buyers were over 52 years old.

Best “we buy houses for cash” companies, Are you a top realtor? The attorney listings on this site are paid attorney advertising. This is especially true if you need to take out a mortgage to finance your purchase. Click below to learn more, or contact a loan specialist today to see how much house you can afford. Choose a home design and location that will be suitable as you age. Returns as of 10/01/2020. Here's Why You Should, Financial Independence Retire Early (FIRE). Absolutely not! While the mortgage costs in a conventional loan will remain constant, taxes, insurance, and homeowners' association fees will continue to climb. You need to consider if this is something you can handle as you get into your 70s and 80s. When you use the expert services of a Partner Agent, you may even qualify for a buyer rebate to put money back into your pocket, or use to furnish your new home. If you need to retire because of health concerns or other reasons, will you still be able to afford the house payment? It’s important to get clear on the real reason you’re considering buying a house at this age so that when you look at your financial portfolio, you can determine whether an investment of this magnitude makes sense for you. Because seniors can use their retirement assets for the loan they want, this gives them an added opportunity to qualify.
The biggest potential financial perk of buying a home in retirement is that your monthly payments can earn you equity that will pay off if the property increases in value. Though it may be a hard pill to swallow, at 65-years old, you may not have much time to play the long game. You’ll also want to look at your financial portfolio with an advisor to best predict what financing might do to your ability to support yourself over the life of any mortgage product you consider. Therefore, you need to put extra effort into researching the housing market with an excellent buyer agent. This will give you the best chance of getting a better mortgage product with the mortgage terms you want. If you’re retired or close to retiring, you may have limited resources that must support you for an unknown period. Are you looking to downsize or otherwise change your lifestyle?

If you're planning to take out a mortgage to make your home purchase when you're in or about to enter retirement, look carefully at the financial impact.

Chances are that this is the home you will spend the rest of your life in.

You may be able to manage your own yard work and repairs when you move into the home. Owning a home can also limit your mobility. Writing for Fool allows her to combine her passions for writing and educating others about personal finance. If you’re in the market for a new home after age 60, you need to think differently than when you were in your 30s. What Should I Consider When Buying a House at Age 60 or Above? This can give 65-year-olds some leverage when applying for a mortgage. Yes. However, the NAR also recently released a report stating that 76% of older millennials (born between 1980-1989) have had to delay plans of homeownership due to increasing student loan debt. Find a Clever Partner Agent in your desired location today and get started on the search for your perfect retirement paradise. Remember that there may even come a time when you are not able to drive.

No age is too old to buy a house if you have the assets to do so and support yourself for the rest of your life. However, is buying the right choice for you?

It’s imperative that you have an expert realtor in your corner who has years of experience in their local market. With this many older buyers, you're in good company. Even with rent control (if you are lucky enough to qualify), the expected continual increases in rent can be devastating over time on a fixed income. You get constant access to spoil your grandkids, and your adult child will be able to assist with your care if you need it in later years. According to the National Association of Realtors (NAR), the median age of home buyers is 32.

Finally, make sure you understand the new tax laws for 2019. Legally banks are only allowed to offer loans based upon financial qualifications. If this sounds a bit unnerving, it should. But at 80-years-old, you need to ask yourself whether to get a 30-year mortgage. If you haven’t purchased a home before, you may be already weighing the pros and cons of whether to continue to rent in retirement. The earlier you purchase a home for your retirement, the more you can take advantage of home equity. According to the 2017 NAR Homebuying Report, almost a quarter of first time home buyers were over 52 years old. It’s that easy, with no impact to your credit score. Are you buying because you are moving to a new location to enjoy your retirement?

If you plan to do significant traveling in retirement, consider how much it will cost to pay for lawn care and other maintenance while you are away. Climbing a flight of stairs to a master bedroom may not be an issue now. Perhaps you know exactly why you hope to buy, but it’s worth taking a closer look at, nonetheless. She has an MBA in Finance and is an Accredited Financial Counselor. This is not necessarily age discrimination, which is illegal under the Equal Credit Opportunity Act, but just hard numbers. If you're moving into a senior community that takes care of these tasks for you, be sure to understand the additional fees. Buying a House Near Retirement Age: Should I Take Out Mortgage or Pay All Cash? Whether you buy or rent in retirement is up to you.

If the house you purchase does not appreciate, or you can’t keep up with the mortgage payments, you could put yourself in a very difficult position. Market data powered by FactSet and Web Financial Group.

Thirty percent of all home sales in … Lenders need to confirm that you not only have the assets but also have access to those assets to pay them back. Clever’s Concierge Team can help you compare local agents and find the best expert for your search.
Copyright, Trademark and Patent Information. For those in retirement, lenders consider 401(k)s, IRAs, and other retirement account distributions. It may be challenging to have to depend on friends or family to drive you to shopping or appointments. Didn't File a Tax Return in 2020? The Ascent is The Motley Fool's new personal finance brand devoted to helping you live a richer life. The information provided on this site is not legal advice, does not constitute a lawyer referral service, and no attorney-client or confidential relationship is or will be formed by use of the site. In some markets, like New York City and San Jose, it could take more than 15 years for buying to beat renting (at least on paper). See Nolo’s articles on Buying a New Home or One in a Development for more information. It’s difficult to think about, but you have to if you want to protect yourself. If you’re going back and forth on whether to buy a house at 65, you need to be practical and understand your motivations, so you can weigh them rationally against how incurring mortgage debt at this age might affect your future. Look for a home with updated windows that tilt in for easier cleaning or consider updating the windows when you move. To base approval on age is discriminatory under Federal law in the United States. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. Before applying for financing, make sure your credit is exceptional and that your debt-to-income ratio is low. Another avenue to check if you are having a tough time qualifying with conventional lenders are FHA loans. It would be terrible to uproot your life and move to Florida only to realize you miss your grandkids or you don't really like the heat, bugs, or the company of other retirees. But these assets must be accessible to the borrower and not currently being used as a source of income. However, when you're buying a home later in life, you have different considerations to make, or your dream home could turn into a nightmare. Be sure you will have funds to pay these fees as they increase over time.