Retired or near retirement

Some loan officers do not know the rules that let retirees qualify. That mistake can cost you a denial you did not need. Lenders cannot turn you down for your age, but they do need proof of income. Retirees can qualify using pensions, Social Security, and other assets.

Who this is for

Retirees who are buying, downsizing, or refinancing.
Near-retirees whose paycheck will stop during the loan.
Homeowners over 62 who are considering a reverse mortgage.

How it works, step by step

Social Security and pension income count in full. Non-taxable income can be grossed up, meaning about 25% gets added back since it is not taxed.
Asset depletion lets a lender turn your savings into income. It works by dividing your savings by the loan term.
Consider a shorter term or a bigger down payment to keep the payment inside your fixed income.
A reverse mortgage is one option among several. Talk to a HUD counselor before you decide.

Pros

Several ways to qualify without a job.
Strong equity often means stronger pricing.
Downsizing can remove a mortgage payment entirely.

Cons

Fixed income leaves little room for rate surprises.
Asset depletion rules differ by lender.
Reverse mortgages carry high costs and affect your heirs.