A mortgage for retirees and disability pensioners

Buying a property is a major investment, and people who are already retired or on a disability pension often decide to make it. They frequently need financial help from a bank. What conditions govern a mortgage for a retiree or disability pensioner? Here are the most common criteria worth remembering.

• A mortgage for retirees and disability pensioners – the upper age limit
• A mortgage for a retiree – a shorter loan term
• Less time to repay – a higher instalment
• A joint loan
• Additional security

A mortgage for retirees and disability pensioners – the upper age limit

People whose income comes from a disability or retirement pension must expect the bank to impose certain age restrictions on them. As a rule the upper age limit for a borrower is 70. There are also institutions on the financial services market offering a mortgage for retirees and disability pensioners up to the age of 75, although such offers have to be sought out far more carefully.

A mortgage for a retiree – a shorter loan term

Seniors receiving benefits from ZUS (the Social Insurance Institution) are trusted customers for banks and generally have no problems obtaining extra cash. Difficulties arise only with a mortgage. It is usually for a large amount and has a long loan term. In this case financial institutions generally have a good many reservations. The objections raised concern, among other things, the loan term. For older people it may be shortened from 30 to 15 years, but it all depends on the particular bank.

SEE ALSO – A DEPOSIT ON A FLAT AND FAILING TO GET A MORTGAGE

Less time to repay – a higher instalment

As we mentioned earlier, retirees and disability pensioners must reckon with the loan term being significantly shortened in their case. Unfortunately another factor follows from it – a higher instalment. A person with less time to settle the amount owed has to pay more each month. This means that when planning to take on a large debt, it is essential to examine your creditworthiness carefully. It should be remembered that disability and retirement pensions are lower than the salary received during working life. On top of that come all the other expenses connected with everyday bills – including medicines and treatment. By making a hasty decision about a loan, you can fall into a debt spiral, so this step must be well thought through.

A joint loan

A retiree or disability pensioner who decides on a mortgage must consider whether to make a younger relative a co-borrower. As a rule this solution brings good results, and banks become more willing to extend the loan term and reduce the instalments. The same applies when the loan is taken out jointly with a younger spouse.

SEE ALSO – A HOME EQUITY LOAN VS A MORTGAGE

SEE FLAT LISTINGS IN KATOWICE LIGOTA

Additional security

A borrower of a certain age must consider many variables. Bearing in mind that the bank may have more doubts about them, they should think about additional security. One of the available solutions is a mortgage entry to secure the loan. Property owners can use their property as security for a loan, but only when the land and mortgage register (księga wieczysta) contains the appropriate entry, which will serve as the bank's security for repayment.

There are many variables that retirees and disability pensioners applying for a mortgage must bear in mind. To get all the detailed information on this subject, it is worth asking specialists for advice. Representatives of REMAX Gold have the expert knowledge and will help resolve any doubts in this area.