Best Mortgage Companies Friendly to Retirees
Conventional wisdom tells us that we should try to eliminate all debt – including mortgages – before retirement. The reason is simple: Once retirement hits, the paychecks stop coming in; if you have no debt, your retirement savings will last longer. In the past, it was the norm for people to enter retirement without a mortgage: You bought a house in your 20s or 30s, paid it off over the next 30 years and by the time you hit your 50s or 60s, you were mortgage-free.
That's not necessarily the norm today; many people now wait until later in life – even during retirement – to buy a home. Indeed, some 25 million people age 50-plus still have a mortgage, according to AARP.The Law Protects You
Here's something to keep in mind: The Equal Credit Opportunity Act prohibits lenders from denying mortgages to retirees if all standard criteria are met – things like your credit score, the size of your down payment, your liquid assets and your debt-to-income ratio. (The Act prohibits credit discrimination not just based on age, but also on race, color, religion, national origin, gender, marital status or because you get public assistance.) It's also illegal for lenders to discourage you from applying or to impose different terms or conditions because of your age (or because you belong to any other protected class).
Technically, no lenders can cater or advertise to retirees because they are not allowed to have an age bias in either direction. All the same, some companies make the process especially user-friendly.Mortgage Lenders to Consider
Here are a few routes worth looking into if you are retired and in need of a mortgage.
1. TD Bank
TD Bank offers a number of mortgage products including fixed-rate, adjustable-rate, jumbos and government loans, plus its own TD Right Step Mortgage for buyers who meet low-to-moderate income requirements (or if the property you're purchasing is in a low-to-moderate income area). To get prequalified, you can call a TD Bank mortgage advisor or visit a TD Bank near you (many have extended hours and are open on Saturdays and Sundays). You will need a signed purchase and sale agreement to start your application, and once it's submitted, TD Bank says it will get back to you with next steps within 24 hours, and will have a loan estimate of your closing costs within three business days of your submitting an application. For more information on mortgages types, see Mortgages: Fixed-Rate vs. Adjustable-Rate and Jumbo vs. Conventional Mortgages: How They Differ.
2. Quicken Loans
An advantage of Quicken Loans: It offers mortgages in every state across the country, and it's one of the largest online retail mortgage lenders, according to National Mortgage News, a publication that assembles quarterly rankings for the mortgage industry. Its mortgage product offerings include fixed-rate, adjustable-rate, FHA, jumbo, VA, reverse mortgage and YOURgage – where you choose any loan term from 8 to 30 years and get a fixed rate with a low payment.
If you're a do-it-yourselfer, Quicken also offers a Rocket Mortgage – a completely online way to get a mortgage that allows you to be approved for your home purchase in minutes (you can still talk with a home loan expert via online chat or by phone). The company aims to close a majority of its loans within 30 days, and it has an A+ rating with the Better Business Bureau (BBB). (For more on this topic, see How Quicken Loans Mortgages Work.)
3. Wells Fargo Home Mortgage
Wells Fargo is an internationally recognized name in the mortgage industry. It offers the usual menu of mortgage products – fixed-rate, adjustable-rate, FHA, VA, military, jumbos, refinance and home equity lines of credit (HELOCs). Its online platform was upgraded recently to improve its processing capabilities, and you can now apply and track your loan application online from your computer, smartphone or tablet. The company's website has a substantial amount of educational material to help you learn about your mortgage options, plus you can compare rates and loan options, and calculate your payments. Even though much of the application is done online, you will have a home mortgage consultant to help you through the process.
4. Your Local Bank
Many people prefer to go through the mortgage process in person, rather than by phone or over the Internet. For some, it may be easier to ask questions when they are face to face with a lender – plus it may mean more personalized service.
If that sounds like you, a good place to start is your local bank. The people there already know you and value your business – both of which can help speed up the process and ensure you won't be left high and dry days before closing. (See also Mortgage Choice: Quicken Loans vs. Your Local Bank.)The Bottom Line
One other consideration: You may be able to use your retirement assets (like a 401k or IRA) to qualify for a mortgage. This is a fairly recent change, and an important one since retirees used to have a more difficult time qualifying for loans due to their lack of income. There are some restrictions, but it can be a good option for many older adults.
Though many people are waiting until later in life to purchase a home, there are numerous other reasons why you might have a mortgage during your retirement years. Instead of making 360 equal payments on a 30-year fixed rate mortgage and calling it done, many people use refinances, second mortgages and home equity lines of credit (HELOCs) to access their home's equity. The money can be used to pay off credit cards, make home improvement, cover college tuition costs, and the like. You could also refinance to lower your monthly payment, which makes it easier to pay on a fixed income.
To Be Sure You Get the Best Deal, ask which category of mortgage you're being granted. If they say Alt-A, be sure you know How They Work. You may also be interested in Mortgage Basics, 4 Alternatives to a Traditional Mortgage and Should Retirees Still Have Mortgages?