Buying a house when you’re retired comes with a different thought process than when you’ve bought in the past. You probably don’t have the same type of income, and you might be worried that you may not be qualified to buy a home. Buying a home as a retiree is easier when you have access to VA products. These products give retired home buyers additional flexibility, which could resolve the questions on your mind. Here’s how your qualify for a VA loan when you’re retired.
Qualifying for a VA Loan When You’re Retired
Check VA Eligibility
As a home buyer who wishes to use a VA loan, you are not required to pay a down payment, you will have lower mortgage rates, and lower credit score requirements. This means more flexibility for home buyers, which is an added bonus if you’re a retired home buyer. Most veterans are going to be eligible for a VA loan, but the first step is to check your VA loan eligibility.
For retirees, lenders want to ensure you can afford to live in the home you purchase. Savings are an excellent start, but monthly income plays a big role in qualifying for a VA loan when you’re retired. For retirees, there are several ways you can include income even though you are no longer working a 9-5.
- Pension/retirement income – One of the biggest benefits of using a VA loan when you’re retired is that you can use your pension toward your income. Additionally, you can include your 401K or IRA that started paying out here too.
- Household income – If someone is living under your roof and working, you can include their income as a household income. In this category, just make sure that you can prove that they will be living with you for at least a few more years.
- Rental Income – If you’ve invested in a rental property, you can surely add that income to your income.
- Other sources – One of the best parts of using a VA loan is that their guidelines are discretionary and can change on a case-by-case basis. If you have a side business that the VA loan doesn’t explicitly approve, there’s still a chance your lender will approve the form of income.
All VA loan users, including retirees, should still expect to meet the additional requirements of a VA loan. These requirements include meeting occupancy requirements, paying closing costs, having a strong enough credit score, and meeting debt to income requirements.
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