Launching and financing his real estate project is not just for assets. Contrary to popular belief, getting a mortgage after 60 years is no longer an exception. However, in 2018, only 4 out of 10 senior borrower files were financeable. For good reason, the desired duration of borrowing exceeds the duration offered by the banks.
In a context where seniors are more and more eager to become homeowners but do not dare to venture, what are the possibilities for a borrower over 60 to finance his real estate project? How to value your file? What are the alternative solutions?
Short loans and strong guarantees
When a borrower applies for a loan, the organization carefully analyzes the professional and financial situation, the amount and duration of the loan and the risks related to reimbursement (state of health, age) before offering the best rate for his personal situation. To put the odds on its side and maximize its borrowing capacity, a borrower over 60 must have strong guarantees and prefer a loan over 10 years or 15 years. To enhance the value of your file with financial organizations, you should not hesitate to put forward the good management of your accounts and your assets (real estate, life insurance, etc.).
Real estate loan insurance for senior
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The borrower insurance protects the financial institution in case of non-repayment or death of the borrower. However, the insurance offered by banks can be a real constraint for seniors because the older the borrower, the higher the insurance, from 0.4 to more than 1% depending on the type of insurance. In some cases, the cost of borrower insurance is higher than the attrition rate, which generally prevents credit subscriptions. Today, other solutions are possible, including the delegation of insurance which allows borrowers to choose their insurance outside that of their bank, provided that the borrower insurance offers the same criteria of guarantee than those required by the lending bank.