Pre-retirees who are thinking about changing their primary residence after they retire and who will need a mortgage to do so may benefit from making the move while they are still working.<\/p>\n
That will not always be possible, of course. If, for example, retirement plans include selling the house in New Hampshire and moving to Florida \u2013 but work remains in New Hampshire \u2013 there is no moving early unless an employer allows for working remotely.<\/p>\n
But near-retirees who do not plan to move far from their current residence \u2013 perhaps because the main reason is to get a smaller home \u2013 should consider getting a loan for that home while they are still working. Qualifying for the mortgage will likely be easier and they may be able to borrow more.<\/p>\n
The importance of income<\/strong><\/p>\n Lenders cannot discriminate against borrowers based on age, and they do not care, per se, whether an applicant is working or retired. What they care about is:<\/p>\n After retiring, borrowers cannot simply provide copies of W-2s, the tax forms that show annual employment earning earnings, to prove that they have the cash flow to repay the loan. Instead, they have to show that Social Security, pension, and retirement account income and assets will be sufficient to repay the loan.<\/p>\n Qualifying with Social Security and pension income is simple enough but qualifying with retirement account income and assets from accounts like 401(k)s and IRAs can get tricky. Retirees need to be taking regular withdrawals from these accounts that are high enough to support their proposed housing payment, or they need to have enough untouched assets in these accounts to qualify under asset depletion calculations.<\/p>\n\n