There are two types of seniors on the mortgage market, active seniors still having a professional activity and preparing for retirement and retired seniors, receiving a well-deserved retirement pension after a professional career. In both cases, we find the acquisitions being made as to the main title, for example, a senior couple who wishes to buy a house as the main residence and rental or senior investors interested in the secondary residence. In fact, many seniors will seek to buy a house by the sea, a chalet in the mountains, or even an apartment abroad (Spain, Portugal, Greece, etc.).
Obtaining a home loan when you are over 50 is not necessarily simple, each situation is different, you must be able to meet the needs of seniors while taking into account their personal and financial situation. It is, therefore, necessary to call on a bank that can offer attractive conditions and above all support the mortgage loan candidate in his real estate acquisition. Senior active or retired, obtaining the mortgage often goes through comparators or through the services of brokers.
Finance a home loan for senior and without a contribution
The contribution is a solid argument from the banks, an amount making it possible to obtain a better rate or simply a mortgage more easily. However, there are tricks to get around this requirement of banks and the first is simply to know that it is not an obligation. It is above all a commercial argument to encourage senior borrowers to use savings, life insurance or a possible ELP as part of the acquisition. Second, the contribution is used to finance the costs of setting up the mortgage. It takes about 10% of the sum of the home loan in terms of costs, which consist of:
- Application fees (bank study)
- Guarantee costs (mortgage or deposit)
- Real estate agency fees (unless direct sale)
- Notary fees (authentic act)
To obtain a mortgage without having to contribute, you should know that banks have a product specially designed for the occasion, this is called the 110% mortgage. This loan simply makes it possible to finance the acquisition of the property and the costs, in a single loan, or through a personal loan. For example, for a house in the amount of 200,000 dollars, the bank will grant 220,000 dollars, which consists of the price of the property (200,000 dollars) and the various costs being covered by the contribution (20,000 dollars).
Which bank should support seniors without any contribution?
Not having a contribution does not mean having any mortgage or ending up with high rates. Most files are offered without contribution, for young people as for seniors and it is essentially the borrower profile that will reassure the banks. On home loans, which can have long durations (on average 25 years), banks are asking for solid guarantees, such as a low debt ratio, sufficient borrowing capacity, and positive bank accounts, ideally without rejections or incidents of payment. To this is added banking domiciliation, which can present itself as a solid argument with banks and credit institutions.
Many banks are positioning themselves on the mortgage market without contribution but they apply different commercial policies which can vary from month to month. This does not facilitate the process of finding an agency capable of meeting the needs of seniors, but home loan comparators allow you to automatically probe the market to find the right addresses. Significant time savings and especially the opportunity to finance its acquisition without contribution.
Landing loan and work for seniors
For those over 50 approaching the end of their career, it is important to take retirement into account and this can be done in the context of a mortgage. This is known as the stage loan. This funding will simply offer active seniors a fixed monthly payment, defined at the outset during their professional activity, then an automatic downward adjustment when they retire. This level loan makes it possible to support seniors in this transition which results in 90% of them in a drop in their income, as much to anticipate this situation in order to avoid any financial imbalance which could call into question the future of young people retirees.
It is also possible to finance work in a mortgage, in fact, many senior borrowers invest in houses to renovate or fit-out according to their needs. The banks propose to include an envelope dedicated to the works, which allows them to finance everything in a single loan and moreover, without the slightest euro of contribution. The borrowing capacity after financing can sometimes be reduced, it is better to extend the credit a little in terms of duration rather than accumulating another monthly payment with a work loan.
Think about borrower insurance
Insuring a home loan is optional, but most banks will require senior borrowers to have a cover or guarantee that can replace this loan insurance. The only problem is that insurance takes into account aging and any health concerns that may appear with age, this automatically translates into additional guarantees but higher prices. Loan insurance can thus weigh heavily on the total cost of credit and reduce the ability to borrow, this sometimes leads to a questioning of the price of the property or the need to find a cheaper property.
Rather than paying the full price, it may be worthwhile to opt for cheaper loan insurance, for example by using a comparator or an insurance broker. The idea being to find a cover presenting the same guarantees but a more advantageous rate, the banks cannot oppose it and the senior borrower finds all its interest there. Note that all credit or insurance-related procedures are free and without obligation.