Later Life Mortgages to Help Seniors Secure Their Financial Future
If you are nearing retirement age and considering buying a home, it is important to know that there are options available for you. Some of those options are later life mortgages. A late-life mortgage has fixed rates that can be as low as 4% per year with no points, which makes them much more affordable than a traditional 30-year fixed rate mortgage. The lower monthly payment will allow you to stay in your home longer without the need for moving or downsizing because of financial reasons.
One of the benefits to a late-life mortgage is that it reduces the risk for both you and your lender. The monthly payment will be lower, which means less cash outlay for you now or in retirement when funds are often limited. For lenders, this type of loan limits their exposure because they can only charge an interest rate up to 12% on these loans as opposed to 30%. That allows them to offer better rates without having to worry about defaults from those who would not qualify for a traditional mortgage due to age or health issues.
Another benefit is that there are no caps on most later life mortgages – meaning if home values rise in your area by 20% over two years but your payments stay constant at $1000 per month, you could sell your home for $120,000 more than what it is worth now.
Later-life mortgages offer many benefits including keeping your current lifestyle without having to move or downsize; protection from rising interest rates because fixed rate late-life mortgage never change; and access to funds at retirement when other sources may not be available.