Old Age and Home Financing: A Question

[Rain Man]

I've been curious about this for a while and was meaning to ask.

Is age a consideration when getting a mortgage? If I'm 80 years old, can I buy a home and take out a 30-year mortgage? It seems like a great way to leverage your wealth, because there's not much chance that you're going to make all 30 years of payments. I don't know if the bank would care or not as long as they get their money in probate or whatever.

[Buehler445]

I could be wrong, but the next of kin would get the estate, which would include debt, I would think.
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[Rain Man]

So you think the bank wouldn't care, then?

And what about someone like me without kin? (Or at least younger kin?) It seems to me that I could buy way above my means as long as I didn't plan to live past 100 or so. No reason not to, as far as I can tell.

[Buehler445]

So you think the bank wouldn't care, then?

And what about someone like me without kin? (Or at least younger kin?) It seems to me that I could buy way above my means as long as I didn't plan to live past 100 or so. No reason not to, as far as I can tell.

I honestly don't know.

But if there were next of kin, the bank would take possession of the asset.
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[Skip Towne]

Very good question. I'm 64. Would anybody give me a 20 year note? I'm afraid to ask.

[Buehler445]

Very good question. I'm 64. Would anybody give me a 20 year note? I'm afraid to ask.

It probably depends on the percentage of the value of the home you can put down.

Just a guess though.
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[Phobia]

In a home loan - or any other kind of loan, the risk elements are all considered and adjustments made in the terms to compensate for risk. Banks are banks because they make controlled gambles. As long as they don't feel there is a strong risk of being burnt and they'll get the property back at a value in which they can profit, they'll take money from anybody.

[Bill Lundberg]

Banks can not discriminate based on age. Regardless of how much sense it may make for them to do so. I've done 30 year loans for people in their 80's plenty of times. Alot of times these people have to stretch their term because they're on a fixed income and it's the only way they can make ends meet.

God I hope my house is paid off before I retire...

[Saul Good]

If you don't have your home paid off by the time you're in your eighties, you probably aren't a very good credit risk to begin with.

[Mosbonian]

I could be wrong, but the next of kin would get the estate, which would include debt, I would think.
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You are headed in the right direction....but here is what really happens.

At the time of death all assets become a part of the estate. From there anyone who has a claim on the assets of the estate must file against the estate to recover their money. At that point things can get real fuzzy. In the case of real estate, if no other member of the family (son or daughter) is on the deed, the real estate is put up for auction and any proceeds from the sale are put into the estate. I believe that there is also a time limit that all creditors have to put in their claim. If they do not respond within the proper time, they lose all rights to their claim. (Legal experts feel free to chime in)

The real rub begins when a family member who survives has their name on the deed. I don't have the time nor space to pound out all the possibilities there.

mmaddog
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[Mosbonian]

In a home loan - or any other kind of loan, the risk elements are all considered and adjustments made in the terms to compensate for risk. Banks are banks because they make controlled gambles. As long as they don't feel there is a strong risk of being burnt and they'll get the property back at a value in which they can profit, they'll take money from anybody.

Lenders won't tell you this but they will loan to you no matter how old, but the parameters of the loan package will ensure that the costs will be recovered.

mmaddog
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[Buehler445]

You are headed in the right direction....but here is what really happens.

At the time of death all assets become a part of the estate. From there anyone who has a claim on the assets of the estate must file against the estate to recover their money. At that point things can get real fuzzy. In the case of real estate, if no other member of the family (son or daughter) is on the deed, the real estate is put up for auction and any proceeds from the sale are put into the estate. I believe that there is also a time limit that all creditors have to put in their claim. If they do not respond within the proper time, they lose all rights to their claim. (Legal experts feel free to chime in)

The real rub begins when a family member who survives has their name on the deed. I don't have the time nor space to pound out all the possibilities there.

mmaddog
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That sounds about right. My grandparents set up a trust, so that's what I'm more familiar with.
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[Hog's Gone Fishin]

Well, I'm 107 and bought two houses this year. I got 15 year mortgages but plan to hump it at work and get them paid off in 5.

[Nightfyre]

Technically, age can't impact the terms of your mortgage. It's considered discriminatory.

[Stewie]

You aren't tied to a 30-year mortgage for 30 years. Hell, when things were crazy in Tokyo they were doing 100-year mortgages. I'm pretty sure the banks didn't expect the mortgagee to live to be 130.

[jidar]

You aren't tied to a 30-year mortgage for 30 years. Hell, when things were crazy in Tokyo they were doing 100-year mortgages. I'm pretty sure the banks didn't expect the mortgagee to live to be 130.

In Japan it's common practice for house loans to pass to heirs so it's not really the same as far as determining the risk of the loan.

[Jewish Rabbi]

Very good question. I'm 64. Would anybody give me a 20 year note? I'm afraid to ask.

Did you forget the 1 in front of your age?

[Stewie]

In Japan it's common practice for house loans to pass to heirs so it's not really the same as far as determining the risk of the loan.

So, in America, where do the loans pass when someone dies?

[alnorth]

So, in America, where do the loans pass when someone dies?

The loan dies. The bank has a claim on the house. If the heirs cant (or dont want to) pay the bank off to keep the house, the house is sold. If the proceeds arent enough to cover the loan (the house was underwater), then it depends on the state and whether it was the first loan or a refinance. In many states, if the first loan is not paid off by selling the house, they have to eat the difference, they can not go after the estate. In other states, or in all cases with a refi, if the sale of the home doesnt satisfy the loan they go after the estate. If the estate doesnt have enough money, they eat the rest.

Heirs might have an inheritance eliminated, but they do not ever inherit debt.