Yes, a 60-Year Old Can Get a 30-Year Mortgage

by Susan Quilty on May 13, 2011

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The best advice is for homeowners to investigate all of their financing options, consider their personal finances and make an informed decision.

Older adults often assume that they would not be eligible for a 30-year mortgage. Legally, however, banks can only offer loans based on financial qualifications alone. This means applicants cannot be turned away based on their age, whether they are 50, 60, or even 90 years old.

In the United States, the Equal Credit Opportunity Act (ECOA) protects adults from mortgage discrimination by not allowing creditors to consider personal factors such as age, race, sex, religion, marital status or national origin. Age alone cannot prevent anyone from qualifying, even when an applicant’s life expectancy is less than the terms of the mortgage.

During the application process, lenders are allowed to ask applicants to give their age (as well as other personal information). However, the lender is not allowed to use that information when deciding whether to approve the loan. It is also illegal for lenders to set different conditions for a loan or mortgage based on an applicant’s age or the ECOA’s other prohibited factors.

Of course, qualifying for a 30-year mortgage does not necessarily mean that it is the best option for homeowners. There are several ways to finance (or refinance) a home. Older adults who are approaching retirement may decide to take out a 30-year mortgage, or they may decide that they would be better off with a 15-year mortgage. When possible, many older adults use their savings to buy an affordable retirement home with cash and avoid a mortgage altogether.

Traditional advice from financial planners recommends that adults eliminate as much of their debt as possible before retirement. This would include reducing not just their mortgage payments, but all forms of debt, such as credit cards and car loans. By reducing debt, or ideally becoming debt-free, retirees have an easier time managing daily expenses once they are living with less income.

While most adults understand the value of having little to no debt during retirement, necessity continues to cause more and more adults to carry a mortgage into retirement. According to recent Federal Reserve statistics, the amount of home-secured debt carried by adults aged 65 to 74 increased between 2004 and 2007 to a median amount of $69,000.

Homeowners who can afford the higher monthly payments of a 15-year mortgage will ultimately save money by paying less interest over the life of the loan. By paying off the mortgage more quickly, they have a better chance of eliminating their mortgage early into their retirement years, or even before they retire.

Homebuyers are not the only older adults who are considering the benefits of a new mortgage. Current homeowners may find that today’s low interest rates make refinancing an attractive option. But before refinancing a new 15- or 30-year mortgage, homeowners should carefully consider their financial situation and various options. Important factors include the length of time they plan to stay in their home, how many years it will take to recoup the closing costs of refinancing, and the amount of their new monthly payments.

Whether refinancing or buying a new home, there is no “right answer” that will fit all soon-to-be retirees. The best advice is for homeowners to investigate all of their financing options, consider their personal finances and make an informed decision. There are benefits and risks to any financing option, but an educated decision is the best investment in your retirement home.

{ 8 comments… read them below or add one }

Alex December 2, 2012 at 5:46 pm

If I have a small income, but have assets, will I be able to get 30 year mortgage?. How much down payment should I put down in order to guarantee that I will not have a hard time getting a mortgage?. If I am planning to buy a coop, will the board can reject me based on my income?
Thank you in advance

Reply

Danny Goodman December 3, 2012 at 11:35 am

Hi Alex,
Those are great questions. The answers would depend on a lot of factors, including where you are looking, price range you are considering, and the amount of your income and assets. I would suggest narrowing down to the communities you would like to consider, and contacting one of the real estate agents on 55places.com. Each one is selected by us based on their expertise and ability to help folks just like you. Good luck, we look forward to helping you find the perfect home and community!

Reply

Dave August 30, 2014 at 11:08 am

Danny,
I have searched through the website and cannot find a listing of Realtors. Can you point me in the right direction?
Thanks!

Jim April 17, 2013 at 8:43 pm

Hi, my wife and I will be looking to buy once we sell our house – no small task in this market. She’s 53, I’m 68. I have pension income totalling about $2100/month and am still an active and healthy photographer/writer with a regular income as a freelancer from several companies, one of whom I’ve worked steadily with for 30 years and pays me a regular salary plus article and photo fees, totalling at least another $2,000/month. My average yearly income thus is around $50-60K per year. My wife also works in her own business but has only shown decent income for the past 2 years, and it’s increasing each year. She’s now making on average $5-7K per month, so our total income is at least $10K per month and some months, better than that.
My question is, once we sell our house, in this market, we’ll only have about $100,000 to $130,000 cash for a down payment. With my age and her only more recent income data, would you suspect we’d have trouble buying a house with $1500/month payments after a 20% down, on a 30 yr mortgage? We’ve been paying $2000+ mo. mortgage, and another $1350/month for outrageous New York State property/school taxes ($16K/year!) for many years…well, she has with her ex husband, I came into the mortgage picture about 2 years ago.
Thank you for any insights you can share.

Reply

Danny Goodman April 18, 2013 at 9:52 am

Hi Jim,

Mortgage lenders use income ratios to help determine qualification. The “front end” ratio is your prospective housing cost, including principal, interest, taxes, and insurance, divided by gross income. The “back end” ratio is your housing cost plus other debt, such as car loans or credit cards, divided by gross income. Generally those ratios are 28% and 36% respectively.

Also, in general, they base income on two years of history. So, depending on other debt and your credit score, if you can include both incomes a $1500 payment should be no problem. Of course, you should contact a mortgage professional in the area you are considering. They can look at your specific situation and recommend the best solution for you. If you see a community you like on 55places.com, contact our partner agent and they will be happy to help you find a great mortgage professional in their area.

Reply

Georgette July 20, 2013 at 4:46 am

My husband and I have brought a block of land in point cook Australia for $180,000 and the value of the land is between $280,000 and $300,000 the morgage insurance is rejecting us for going for a house loan because my husband is 60 years old

My husband earning is $75,000 a year and I am earning $35,000 a year and to combined the house and the block which the block is $180,000 and the house is $320,000 and we can not get morgage insurance, we are using the block as a asset for a deposit for the house to b built, can you help us

Reply

Jill November 26, 2013 at 4:42 pm

when your retired and take mortgage out on your home do they require you have mortgage life insurance

Reply

LORI M. January 26, 2014 at 6:06 pm

Georgette:

They cannot discriminate because of age. So your hsband being 60 years old should not have anything to do with it.

JIll:

I have never heard of mortgage life insurance. I have had two home loans and never had such a thing. I have only heard of Homeowner Insurance.

Reply

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