Do banks lend to people close to retirement?

Any general questions you might have in regards to loans and finance.
callofjuarez
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Joined: Mon Feb 01, 2016 8:01 am

Do banks lend to people close to retirement?

Postby callofjuarez » Mon Jun 25, 2018 3:42 pm

Hi Home Loan Experts.

I’m 51 years old and want to buy a property. I work as a chief security officer at a medical research company in Sydney. I’ve been wondering about taking out a home loan to buy a nice place to settle in after I retire. I want to retire early, if possible and trave. Do all banks have the same lending criteria for people nearing retirement?

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Otto Dargan
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Location: Sydney, Australia
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Re: Do banks lend to people close to retirement?

Postby Otto Dargan » Mon Jun 25, 2018 4:47 pm

Hi callofjuarez. Welcome to the forums.

As you’re closing in on retirement, you’ll have to consider a few things to getting approval for a home loan:
  • Exit strategy: An acceptable exit strategy or how you intend to pay out your mortgage will depend on your asset position, income and retirement plans.
  • Lender choice: You need to apply with a lender that understands and accepts mature age borrowers.
We are experts in the policies of the major banks as well as a specialist or non-bank lenders. We deal with almost 40 lenders all over Australia and know which banks have lenient lending guidelines for people who are about to retire from work.

You can call us on 1300 889 743 or simply fill in our free assessment form and we can help you apply for a home loan.

Cheers,
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

callofjuarez
Posts: 10
Joined: Mon Feb 01, 2016 8:01 am

Re: Do banks lend to people close to retirement?

Postby callofjuarez » Mon Jun 25, 2018 6:42 pm

What exit strategies would lenders accept if you are seeking a home loan and it’s clear you will be in retirement within a 25 or 30-year home loan term?

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Otto Dargan
Mortgage Specialist
Posts: 7021
Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
Contact:

Re: Do banks lend to people close to retirement?

Postby Otto Dargan » Mon Jun 25, 2018 7:13 pm

Hi callofjuarez,

Lenders have different opinions about what a reasonable exit strategy is.

As a general rule, investment loans don't need an exit strategy as you can sell an investment property when you retire and it won't mean you lose your home. On the other hand, selling your home to pay out a debt leaves you with nowhere to live, which lenders see as putting you in financial hardship.

Lenders commonly accept strategies that include:
  • Reducing the loan term: This is to ensure you pay off your home loan before you retire (the acceptable retirement age varies from lender to lender).
  • Downsizing your property: Some lenders are ok with you selling your home and moving into a smaller property after you retire.
  • Using your super fund: You can use a lump sum or ongoing income from your superannuation fund to pay out the home loan after you retire. Some of our lenders accept a projection of your super and mortgage balance as evidence that you can repay the loan.
If these strategies doesn’t work for you, it may be better to avoid getting a mortgage.

You should apply only when you’re sure that you have a solid exit strategy that you've discussed with your financial adviser.

Please enquire online or call us on 1300 889 743 to speak to a mortgage broker who specialises in finding home loans for foreign citizens.

Cheers,
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

callofjuarez
Posts: 10
Joined: Mon Feb 01, 2016 8:01 am

Re: Do banks lend to people close to retirement?

Postby callofjuarez » Mon Jun 25, 2018 8:33 pm

Thanks for the replies, Otto. I’ll call your office by Friday to discuss my situation and retirement home loan needs. Cheers :)


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