Borrowing after the age of 60 is not impossible. Some banks even find benefits to these profiles. However, you will have difficulty finding a borrower insurance which will further complicate the obtaining of the mortgage.
It is not uncommon for retirees to have real estate investment projects. Some are convinced that it is difficult to take out a loan after the age of 60. Still, getting a loan closer to retirement is quite possible. The banking institutions even offer real estate loans specific to this category of population, as confirmed by the specialized site Senior Magazine.
The retirement approach, the opportunity to consider new projects
The transition from active life to retirement makes it possible to plan new projects such as an investment in rental real estate or the purchase of a second home. In some cases, it may also be to anticipate a more fragile health by buying a house on one level or an apartment with an elevator. These different projects generally require the subscription of a credit.
While a few years ago, banks were cautious about lending to their customers approaching retirement, this is no longer the case. Customized home loans are actually offered.
Real estate loan offers dedicated to retirees
When a person aged 60 or nearing this age applies for a home loan, the lender evaluates several important criteria. Does the retiree already have a wealth? How does his income fluctuate? While the retirement provides the borrower with a regular income, the latter remains lower than the one he received during the last years of his working life. Banks offer loan offers that take this situation into account.
Indeed, these loans provide for a decrease in monthly payments at the time of leaving the working life. They thus maximize the amount of the loan by taking into consideration current and future repayment possibilities. In general, institutions allow the change of the date of passage from one monthly payment to another, the date of retirement is not always known in advance. It sometimes happens that two successive decreases in monthly payments are considered when a couple retires on different dates.
What solutions for borrower insurance?
Access to the mortgage is conditional on the subscription of a borrower insurance. This cover allows the bank to be assured of recovering the outstanding capital in the event of death or illness. However, the older the borrower, the higher the risk associated with their profile, a health problem that can occur at any time. As a result, insurance companies are particularly reluctant to take care of people over 60 years old.
Banks offer these borrowers group loan insurance but with a much higher interest rate. In addition, in most cases, these contracts are no longer available to borrowers over age 65 and coverage no longer applies beyond age 70. Thanks to the delegation of insurance , that is to say, the adhesion to an insurance of individual loan respecting the equivalence of the guarantees with an external insurer, the retirees can hope to benefit from a cover until the age of 85 or even 90 years.
For pensioners with health problems, another solution exists: the AERAS convention (Insurance and Borrowing with an aggravated health risk). Established in 2007, this agreement allows the insurer to bear the risk represented by these people in return for a premium or premium rate. The AERAS agreement thus facilitates access to borrower insurance for seniors.
Always to support the oldest borrowers in their real estate project, the bonded mortgage loan was created in 2007. It has the particularity of not requiring the subscription of a loan insurance or a life insurance. However, this option is reserved for seniors who are already owners since the property acts as a guarantee for the granting of the new mortgage. Thanks to this formula, the borrower can free cash to carry out work, make a donation or buy a new property.
Other solutions to buy a house after 60 years
Traditional lending is not the only way seniors can become homeowners. Indeed, several other solutions exist.
The bridge loan is to advance the funds needed by the borrower for future acquisition. The borrowed capital is repaid when the sale of the first property is effective. The bridge loan for seniors is usually a loan in fine which means that no monthly payment is to be paid during the term of the loan.
Another solution: the mortgage life loan . This loan may be suitable for retirees who own their home and need an extra amount. The amount of this varies according to the value of the house. It can be paid in the form of a single capital or a regular annuity. In the first case, this solution is more like a traditional loan since it will allow the borrower to benefit from a cash advance that can be used at his convenience. However, the lender will settle itself upon the death of the borrower through the transfer of ownership of the property. The disadvantage is the inability to inherit his children from housing.
Finally, how to choose your credit after the age of 60? The best solution is to use our online loan comparator . This tool will allow you to find a mortgage at the best rate and adapted to your profile in just minutes. You will then need to specify the nature of your project, the desired amount, the repayment period and your age in particular. A broker can also assist you in this process. If borrowing after age 60 is not an impossible operation, it is important to keep in mind that taking out a home loan commits you for several years. It is therefore advisable to think carefully about the planned project before taking the plunge!