Ask Terry Questions Qualifying for a Mortgage After Retirement

Qualifying for a Mortgage After Retirement

By Terry Savage on February 16, 2014 | Housing / Real Estate

Terry, I am confused regarding your answer to “Buy Or Rent In Retirement”. You told the gentleman that he would not be able to get a mortgage once he retired because he won’t have an income. He said he will be getting a pension and social security, plus take on side jobs for his income. I plan on selling my condo next year purchasing another and I am also retired. Are you saying that I will not be able to get a new mortgage, because I no longer have an actual salary? My income is a monthly pension, monthly annuity and monthly social security. Are these not considered income when applying for a mortgage? Thank you.

Terry Says:  I agree that was a bit confusing.  Social Security and pension income, as well as lifetime annuity payments are certainly considered income for a senior’s mortgage approval. But “variable” income, such as from dividends, or  side jobs, is not likely to be considered.  And you might be able to make an argument that Minimum Required Distributions from an IRA are income — but those could be variable, depending on the performance of your IRA assets.  The point is that banks are nit-picking every single thing on a mortgage application.  So if you wait until you are retired you will have to “prove” a lot more about your income, than if you had gotten the mortgage while you were still employed!

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