Seniors have lots of options -- and even some advantages -- when it comes to financing the purchase or rehabilitation of a home.
"It's actually easier for retired people right now to qualify for a mortgage because they don't have to go through the extra steps we're doing for everyone else to verify they are still employed," said Audrey Boissonou, president of the California Association of Mortgage Professionals (CAMP).
Marge Bottari, who serves on the CAMP Board of Directors, emphasized that seniors seeking any type of home purchase financing or refinancing will still need to document they are creditworthy. Seniors may need to produce some special paperwork such as award letters for pensions or other retirement plans and documentation of Social Security payments.
Boissonou said even with these requirements, "It's just as easy to qualify for a convention loan for someone that is retired versus someone who is currently employed."
Senior homeowners who want to remodel their home to make it safe and comfortable to age in place have choices for how to pay for that work.
Boissonou said refinancing a home to access equity is an option some homeowners are exploring if they need cash but don't want to disturb their current investments.
A "reverse mortgage" is another option available exclusively for seniors.
"It's a way of accessing part of the equity in your home in the form of a loan that you don't need to make payments on for the rest of your life as long as you live in the home," Bottari said. She explained borrowers still need to pay property taxes and insurance and maintain the home.
Bottari said it may be easier to secure a reverse mortgage than a home equity line of credit, adding, "It gives you access to the equity in your home in a way that's not as strict as other loans."
"Reverse mortgages have become a hot topic these days because people's part-time jobs have gone away and people are worried about additional income," she said.
Bottari indicated funds from a reverse mortgage can even be used to purchase another home.
The logistics of applying for a loan during COVID-19 is evolving to protect the health of all parties involved. Bottari said that loan officers are still able to meet face-to-face with clients while following social distancing protocols but much of the transaction can be conducted virtually.
"Usually it's one live meeting with the borrower and then at the closing with a notary; everything else can be handled online," Bottari said.
A financing solution to either purchase or fix up a home or tap any equity in the home needs to fit the homeowner. Finding the right fit means doing some homework. To get the process started, "You just need to talk to a good loan officer and have a conversation," Bottari said.
Editor's note: David Stark is public affairs director for the Bay East Association of Realtors, headquartered in Pleasanton.