Does It Make Sense to Get a 30-Year Mortgage at Age 66?

PBS NewsHour business and economics correspondent Paul Solman says the answer depends on three key factors

by Paul Solman • Next Avenue
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PBS NewsHour business and economics correspondent Paul Solman is now answering questions from Next Avenue visitors about personal finances, business and the economy. His advice will appear on Next Avenue as well as Solman's PBSNewsHour blog, Making Sen$e With Paul Solman, and the Rundown, NewsHour's blog of news and insight. PBS NewsHour is an hour-long television program and accompanying website with the mission of providing intelligent, balanced and in-depth reporting and analysis of the day's most important domestic and international issues and news.

Do you have a question for Paul Solman? Email it to us and we'll pass it along.
 
I am 66 years old, with a retirement income of $52,000 (pension and Social Security). Can I get a 30-year fixed-rate mortgage? If yes, does it make financial sense to do this?  —Jim Raymond
 
You mean, I think: If you're 66, does it make sense to take out a loan that will only be paid off at age 96? Won't a lender say, "Forget it — you won't live long enough"?

Don't worry about the lender. A standard rule of thumb applies, regardless of your age: So long as your mortgage payments are no more than 45 percent of your gross income, you should be able to get the mortgage.

(MORE: How Retirees Can Avoid Refinancing Troubles)

And since Social Security and pension income — the latter up to the federal guarantee limit of $4,653.41 a month for 2012 — are as close as you can get to a sure thing these days, the lender should be more reassured than with other kinds of income, which can end abruptly at any moment. (By the way, why not call a mortgage broker?)

As for the "should you?" part of the question, the answer is: It depends.

Click here for the three factors to consider on Next Avenue

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