A relatively advanced age undeniably restricts access to financing solutions for the acquisition of real estate. But this situation is not inevitable and seniors always have entry doors to successfully take out a mortgage.
Professionals are more flexible
If the banking establishments were friable at the idea of financing the projects of the seniors, the court of the events is rocking smoothly. Indeed, banks are taking a reverse turn by reducing their restrictions. They therefore have a stronger desire to take the risk of lending to older people.
They should therefore not hesitate to go to the professionals to launch a study on the feasibility of a project, rather than liquidate the savings. With market rates remaining historically low, it would indeed be a shame not to take advantage of them.
If the establishments offer more flexibility, the required guarantees do not remain diminished nevertheless. Seniors must be able to provide concrete guarantees to support the case.
A necessarily reduced loan term
For this, there are various conditions to provide to allow strengthening the probabilities to succeed in funding the file. First of all, you should know that borrowing with an advanced age will inevitably affect the duration of the credit. Generally, seniors will be able to borrow between 10 and 15 years while the average borrowing duration is 18.6 years according to the Observatoire Crédit Logement CSA.
The risk of non-repayment being assessed in relation to the life expectancy of the borrower and the health of the borrower, some banks will rarely go beyond 15 years. However, under certain conditions, the maximum age at the end of the loan can be up to 90 years, or even more.
Enhance your file via heritage
First of all, seniors in possession of an existing movable heritage can mortgage their property to guarantee the loan in the event of unforeseen circumstances. Real estate is also an option not to be overlooked, via the pledge of life insurance or a portfolio of securities.
Subscribe to borrower insurance, without neglecting the conditions
If the borrower insurance remains legally optional, the banks do not take the risk of financing the projects in its absence. Especially in the context of a credit intended for a senior, this insurance will be compulsory to cover reimbursement in the event of death. In such a case, the heirs can enjoy the property without having to reimburse the share of the deceased parent.
However, you should be extremely vigilant regarding the conditions covered by the insurance and ensure their validity until the end of the contract.
Finally, to reassure the lender about the guarantees offered, it is possible to use clever means. For example, a senior can take out life insurance and put the bank as a beneficiary. In the event of the borrower’s death, the latter will receive the capital calculated on the basis of the monthly contribution. Although the cost can be expensive with the advanced age of the contract holder, this alternative can definitively push the bank to make the decision to finance the senior.