So it is no wonder that the vigorous retirees still have many plans – for example, to buy a house. Because the risk of not receiving repayments is too great for them. Even though taking out a loan for pensioners and seniors is not a problem today, the various institutions offer their loans on very different terms. Saved and subsidized old-age provision can in future be used for owner-occupied real estate. carfin.org.uk has more notes
How it works with the financing of construction projects for retirees
The construction or acquisition of real estate and the associated mortgages are traditionally taken over at a young age. For pensioners or employees on the verge of retirement, credit institutions are more likely to default and are often prudent in lending. But more and more older people are focusing on mortgage financing at retirement age, and this will also applies to the banks.
After all, many retirees have grown into old age and can live in their own homes. If you want to buy your own home at a later date, a few tips and precautionary measures can easily provide you with financing for retirees.
Repayment can be made the faster the larger the repayment
In order to convince the bank that you can take out a loan despite your old age, you should keep a few pointers. One of the important adjustment screws is the actual financing of the construction, which should be structured differently for the pensioners than for the young people. These include above all: repayment:
The repayment can be made the faster the larger the repayment. Borrowers should therefore agree on the highest possible repayment installment, which will be adjusted when appropriate. Just before retirement pays off a good repayment, since you still get an income here. Rate of installments: An increase in repayments is also associated with an increase in installment payments.
Many banks are prepared to pay large sums for the early repayment of the entire loan. Mortgage financing for retirees is all the more easily adaptable to the changing living situation, the more flexibility there is. The following overview shows the effects of higher amortization with correspondingly higher rates. In this example, a 65-year-old couple needs 15 years to repay USD 150,000.
At the same level, a young couple has more than double the time and less monthly pay but pays more than double the return. This makes it clear to the bank that repayment of debt over a longer time horizon is ensured. This is especially rewarding if you can expect an increase in real estate value, for example through an attractive location or modernization.
High repayment risk as long as the borrower is still alive
Often in attractive old age attract attractive benefits from the insurance contract. The interest rate, in addition to the income, determines how well you pay the money. The lower the interest rate, the cheaper or faster the repayment can be. So you can settle your demands safely and on time at the house bank. The conditions are ideal for many at this time: they have found a secure job, are looking to start a family, they want fixed facilities and a home for themselves and their fellow human beings.
A secure outcome is central to the bank’s loan repayment. Older people, on the other hand, seem to be a less attractive target group for mortgage loans: retirees also receive a secure but often lower salary and are at increased risk of illness and death.
There is a high repayment risk as long as the borrower is still alive. As a rule, banks pay this risk by raising interest rates. In this context, the legislator requires the credit institutions significantly more to check the default risk of the borrower. It must be ensured that the money taken up can be repaid over the entire lending obligation and also thereafter.
Directive is constantly being improved and invalidated
Retirees in particular can therefore be affected by the directive. But there is also good news for the elderly: on the one hand, the National Bank reserves the right to interpret how strictly it wants to interpret the law; on the other hand, the directive is constantly being improved and invalidated. For example, real estate itself is increasingly included as collateral that can benefit the pensioners.
Are home loans for pensioners even desirable? Today’s retirees usually still have an interesting pension and are therefore usually able to pay their installment on a regular basis. Owning your own property is an interesting precaution, as it has many opportunities.