Can a 79 year old get a mortgage?

cearbhaillFebruary 15, 2012

My 79 year old mother would like to sell her home and move closer to her children. She has so much junk in her house that she has decided that she must buy a new home then slowly move her stuff before staging and selling the older home. Her current home is paid for and she insists that she has the money to own two homes for as long as it takes her to move stuff out and sell. I reminded her that houses aren't moving all that quickly and she doesn't seem to mind if it takes a year.

Her plan is to get a mortgage on the new home.

I wondered if a near 80 year old person could take out a mortgage so sniffed around online and found the prospects to be dim for very understandable reasons.

Her realtor just told her it would be no problem to get her into a mortgage.

I pushed her to speak with a mortgage professional so she called "her guy" at the bank and he told her the same thing.

She is going in to fill out the "preapproval" forms tomorrow.

I haven't gotten or had a mortgage in many years but this makes no sense to me. She has plenty of money and the income to qualify but she is almost 80.

How does this even work?

And am I correct in assuming that this "preapproval letter" she hopes to obtain is not a guarantee and things are still likely to get hung up later in the process?

I don't know what other info you need to help me help her- just ask and I will answer as best I can.

But my major question is whether mortgages are available to folks this old. I think she should buy the new home outright but for whatever reason she is reluctant to do that.

I would also be grateful for any links anyone might have about this topic.

Thanks

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Sophie Wheeler

Sure, mortagages are available to anyone over 18. To make them less so based on age alone is discriminatory. She will need to meet the same income/debt ratio guidelines as anyone else, and depending on the property she chooses, the bank may require more down payment, but she should not have any difficulty with obtaining a mortgage. Why would she? If she only manages a few years of payment before she dies, then either her estate keeps up the mortgage or the bank takes over the property. It's an all win situation for the bank if the property is worth loaning money on in the first place.

    Bookmark   February 15, 2012 at 12:50PM
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kats_meow

FWIW, even if she didn't have sufficient income to qualify retired people can sometimes qualify through an asset depletion loan. This is a loan that is based upon depleting assets over a period of time that is based upon life expectancy. This is the type of loan used for example by someone who is retired with no pension but who has a high net worth.

    Bookmark   February 15, 2012 at 1:09PM
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rafor

Wouldn't it be easier for her to get either a mortgage or a home equity loan against the house she already owns and then use that money to buy the new house? Just a suggestion.

    Bookmark   February 15, 2012 at 1:10PM
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Billl

Believe it or not, "death" isn't really something a mortgage company cares too much about. When a mortgage holder dies, the mortgage must be taken care of one way or the other to clear the estate.

Also, SS and pensions are fixed incomes, so they don't worry about you losing your job etc.

The only thing I'd worry about it tax implications. Some states have exemptions for age for taxes on primary residences. There are also capital gains exemptions for the sale of a primary residence, but you have a 5 year window to sell. That still would be something to keep in mind since you never know what life will throw at you.

    Bookmark   February 15, 2012 at 1:12PM
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cearbhaill

Thanks everyone.
Seems I was mistaken :)

But about the preapproval letter- is that something that can be relied upon or is there something more solid?

    Bookmark   February 15, 2012 at 1:27PM
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calliope

"I think she should buy the new home outright but for whatever reason she is reluctant to do that."

To buy a home outright when her residense is not yet sold would could mean depleting her fluid investments and savings. It's understandable why she wouldn't want to do that. If she needed a lot of money quicky, she'd be dependent on selling one of the houses quickly for whatever she could get out of it. She'd be house poor.

    Bookmark   February 15, 2012 at 7:37PM
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Happyladi

Maybe it's time to get rid of some of the stuff and not just move it.

    Bookmark   February 15, 2012 at 11:33PM
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cearbhaill

"Maybe it's time to get rid of some of the stuff and not just move it."

Do you seriously think that hasn't been discussed, suggested, and pleaded for for for years?

This is how she wants to do it and that's about the long and short of it.
It's going to be hard enough for her to give up her old home purely so it is easier for us to visit her- our "allowing" her to do it her way is the path we, her children, have chosen.
It is, after all, her stuff.

And using the word "allow" in the same sentence with "my mother" is absurd anyway- she is a force of nature.

    Bookmark   February 16, 2012 at 12:32PM
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cmarlin20

Yep, I get it, it is her home, her stuff and her decision. You only get to watch...

    Bookmark   February 16, 2012 at 12:58PM
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marie_ndcal

Could she rent? As a senior her age, there is no way in xxxx I would buy a house. I too have alot of stuff, but I can get rid of it real fast, even if it means the kids have to put it in storage. But to some elders, "junk" means more to some than others. My friend started several years ago distributing her stuff and yes she misses it, but is glad it is gone before the arguments start.

    Bookmark   February 16, 2012 at 5:18PM
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brickeyee

"My friend started several years ago distributing her stuff and yes she misses it, but is glad it is gone before the arguments start."

Just make sure any will gets updated if 'named items' are not going to be part of the estate.

    Bookmark   February 17, 2012 at 1:47PM
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marie_ndcal

Thanks, for reminding us about the estate. In my friends case alot of it was farm equipment, and her son and their lawyer did check everything out.
Back to the OP, remind her to check with the insurance agent if she left one home and moved into another, leaving the first one without anyone living there--It is greater chance for break in's and also if she is by herself sorting etc, that is not good either. Yes us oldies can be stuborn, but certain situations can be dangerous. she could fall and no one would know, etc.
I do hope she listens to her kids.
from a senior citizen

    Bookmark   February 22, 2012 at 9:13PM
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lov2garden

My Dad got a 30 year mortgage when he was 82! He thought it was so funny. When he passed away, the condo was sold and the mortgage paid off. Oh, he was a pack rat! I packed up his old house and rented a storage unit for everything except his rubber band, paper clip, plastic bag, plastic containers, empty box, etc. "collections". Each item went into a numbered box with a list of contents on a spreadsheet. Only the everyday essentials went to his new place where I unpacked everything and had sheets on the beds, food in the fridge, pictures on the wall etc before he moved in. Sometimes he would ask about things that were in storage and I could show them on the sheet that they were not thrown away. It cost a small fortune in plastic totes but it was worth it for his peace of mind and dignity. He appreciated the respect I showed for him and his earthly possessions (including my baby teeth???!!!)

    Bookmark   February 29, 2012 at 10:15AM
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