Retired homebuyers without a job can still qualify for a mortgage with other sources of qualified income. Lenders want to know whether or not the borrower is going to have the ability to repay. How is the homebuyer able to afford a housing payment without stressing financially for the next three years?  What type of qualified income will the borrower have?  Social security income and pension income are considered qualified income and can be used for mortgage qualification.

Gustan Cho Associates also offers alternative forms of financing for borrowers Buying A Home After Retirement. Our asset depletion mortgage loans are very popular for borrowers with assets but without qualified income. In this article, we will discuss and cover Buying A Home After Retirement And Qualifying For A Mortgage.

Understanding The Mortgage Process When Buying A Home After Retirement

Understanding the mortgage process is important when buying a home after retirement. Maybe a home buyer may want to purchase a home prior to officially retiring due to being able to use their income. Social security and pension income can be used as qualified income when qualifying for a mortgage.

Many homebuyers can purchase their home cash using their pension investment accounts. As long as the person is at least 59 ½, withdrawals from retirement accounts such as a 401(k) or IRA count as qualifying income. Borrowers who have substantial liquid assets and/or investments can use those investments to qualify for asset depletion mortgage loans.

Dale Elenteny of Gustan Cho Associates is the asset-depletion accounts manager. Dale said the following with regards to asset depletion mortgage loans:

To qualify for asset depletion mortgage programs, the borrower needs significant assets. No income tax returns are required. Therefore, monthly income from employment does not matter.

Government And Conventional Loans

Lenders want to see qualified income when qualifying for government and conventional loans.

The following income types are considered qualified income when buying a home after retirement:

• Social security income
• Pension income
• Royalty income
• Child support and alimony income if the income is likely to continue for the next three years
• Other documented income that will likely continue for the next three years

Tax-free social security and pension income can be grossed up 15% on FHA loans and 25% on conventional loans.

Using Alternative Financing When Buying A Home After Retirement

As mentioned earlier, borrowers with substantial assets can explore our asset depletion mortgage program. Gustan Cho Associates are experts in helping borrowers qualify for our asset depletion mortgage program. Income tax returns are not required. No income documentation is required with our asset depletion loan program.

Another program we have for self-employed borrowers is the bank statement loan program. 12 and 24 months bank statement deposits are averaged and used as the monthly income. Withdrawals do not count. Only deposits count. There are no income tax returns required on our bank statement loan program.

Creative Ways Of Qualifying For A Mortgage Prior To Retirement

Some homebuyers who want to purchase a home after they retire want to apply for a mortgage prior to retirement. This is a great idea to apply for a mortgage while they are still on their job prior to retiring. However, make sure that you do not give notice to your company that you are retiring. The reason is one of the questions lenders will ask your current employer is what are your chances of being employed for the next three years. If you already have given notice to HR that you are retiring, your company’s HR will not tell the lender that your likelihood to be employed for the next three years is likely. If you are planning in purchasing your retirement home while still working, then you can qualify for a second home mortgage with a 10% down payment. Second homes require a 10% down payment.