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My husband and I have excellent credit and very little debt. We lost everything, including our home, in 2008. We had to declare bankruptcy to get out from under our home we bought and poured money into with new tiles, a pool and landscaping.
These last 10 years, we’ve rented. We’ve been excellent tenants and redid the home inside and out. Now because the market here has exploded the landlord wants us to move, as he wants to cash in on the boom. He’s giving us six months. We are devastated. He always said we could stay here forever as we were perfect tenants.
Our dilemma is that there are no decent affordable homes in this area nearby, and we just retired. We want to look for a small home to buy that belongs to us.
Is it feasible for two 70-year-olds to purchase a small home? Our combined Social Security is over $46,000 and we have savings and a 401(k). Our credit is over 800 for each of us.
-Sick of Renting
Dear Sick,
I’m not going to sugarcoat it: Now is an absurdly difficult time to buy a home when you don’t have equity to trade up. Being thrust into the madness of this housing market just as your retirement years are beginning is an especially tough blow.
Lenders can’t discriminate on the basis of age. So the fact that you and your husband are 70 years old shouldn’t preclude you from buying a home.
But the challenge here is twofold.
For starters, retirees are considered riskier borrowers than people who have jobs. If you’re depending on income from retirement accounts, your income can drop substantially if the stock market tanks.
The second problem is one buyers of all ages grapple with. Bidding wars are driving up selling prices above already inflated list prices in many parts of the country. Banks won’t lend you more than the appraised value. That means buyers have to come up with cash not only for a down paymentbut to make up the difference between the appraised value and selling…
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