Best Mortgage Lenders for Retirees in North and South Carolina: How Retirees Qualify
Yes, retirees can get a mortgage. Retirement itself does not prevent you from qualifying, and federal fair-lending law generally prohibits creditors from discriminating against applicants because of age. What matters is whether you have qualifying income, acceptable credit and debts, sufficient assets when required, and a property that meets the mortgage program's guidelines.
For retirees, the bigger challenge is often figuring out how to document income after the paycheck stops.
Social Security, pensions, annuities, retirement-account distributions, rental or investment income and, under certain mortgage programs, eligible assets themselves may potentially help you qualify.
The best mortgage lender for a retiree is often one that understands the different ways retirement income and assets can be evaluated instead of looking only for a traditional paycheck.
I'm Paul Mattos, a mortgage broker with Refine Mortgage, licensed in North Carolina and South Carolina. As a broker, I compare loan options from multiple wholesale lenders, which can be particularly useful when retirement income or substantial assets do not fit neatly into one lender's standard approach.
Can Retirees Qualify for a Mortgage?
Yes.
There is no rule that says you must be employed to get a mortgage.
There is also no maximum age for a traditional mortgage simply because of the length of the loan. A qualified borrower can potentially obtain a 30-year mortgage at 65, 70 or older.
Instead of focusing on whether you still have a job, the lender evaluates factors such as:
Qualifying income
Credit history
Monthly debts
Assets
Reserves when required
Down payment
Property
Loan program
Applicable underwriting requirements
For retirees, the important question becomes:
What income and assets can we actually use for mortgage qualification?
That answer can be very different from one retiree to another.
Can Social Security Income Be Used for a Mortgage?
Yes.
Social Security retirement income can generally be used as qualifying income when it is properly documented.
Depending on the loan program and circumstances, documentation may include items such as:
A Social Security award letter
SSA-1099
Bank statements showing receipt
Other documentation required by the lender
The exact documentation depends on the type of Social Security benefit and mortgage program.
Can Social Security Income Be Grossed Up?
Potentially.
When some or all of qualifying income is not subject to federal income tax, mortgage guidelines may allow the lender to increase—or "gross up"—the nontaxable portion for qualification purposes.
This does not mean you actually receive more money.
It is an underwriting calculation that recognizes that nontaxable income can provide more spendable income than the same amount of taxable income.
The amount that can be grossed up and the documentation required depend on the mortgage program and your tax situation.
This can matter for retirees whose income comes primarily from Social Security or other eligible nontaxable sources.
Can Pension Income Be Used to Qualify?
Yes.
Pension income can generally be considered when it is documented and meets the applicable program requirements.
Documentation might include:
Pension award documentation
Retirement statements
Tax documents
Bank statements showing deposits
Depending on the type of pension and mortgage program, the lender may also need to determine whether the income is expected to continue for the required period.
The key is not simply having retirement income. It is documenting it in the way the mortgage program requires.
Can Annuity Income Be Used for a Mortgage?
Potentially.
Income from an annuity may be usable when the payments are properly documented and meet the applicable continuation requirements.
The lender may need to review:
The annuity contract or statement
Current account value
Distribution amount
Frequency of distributions
How long payments are expected to continue
This is one reason I like to review retirement accounts early rather than waiting until a buyer is under contract.
Can IRA or 401(k) Distributions Count as Income?
They can.
Regular distributions from retirement accounts may potentially be used as qualifying income when they meet the applicable mortgage guidelines.
The lender may need to document the distribution history or current distribution arrangement and confirm that sufficient eligible assets remain to support the income for the required period.
That creates an important planning opportunity.
If you have substantial retirement assets but are only taking modest distributions, do not automatically increase your withdrawals just because you think that is the only way to qualify for a mortgage.
There may be another option.
What Is Asset Depletion for a Mortgage?
Asset depletion—sometimes called asset dissipation—is particularly important for retirees and high-net-worth borrowers.
Instead of relying entirely on monthly income, certain mortgage programs can convert eligible assets into an amount that can be considered for mortgage qualification.
The general concept is straightforward:
You may have significant assets available even though your taxable or monthly income looks relatively low.
Depending on the mortgage program, eligible assets may be adjusted according to program rules and then divided over a specified period to calculate qualifying income.
For example, a retiree might have substantial funds in:
IRAs
401(k)s
Brokerage accounts
Stocks and bonds
Savings
Other eligible financial assets
A traditional income-only review might not tell the complete financial story.
An asset-depletion program may provide another way to evaluate the borrower.
For conventional loans, that generally means enough eligible assets to support the distributions for at least three years.
Not Every Asset Counts Dollar for Dollar
This is important.
You cannot simply take your total retirement balance and divide it by a random number.
Mortgage programs have specific rules about:
Which assets are eligible
Whether retirement assets are discounted
Whether taxes or penalties need to be considered
Whether the funds are already being used for closing
Whether the same assets are being used to generate another source of qualifying income
Required reserves
The divisor used to calculate income
Borrower age or access to retirement funds when applicable
Those details can vary substantially by mortgage program and lender.
That is one reason retirees with significant assets can benefit from comparing more than one financing option.
Conventional Asset Depletion vs. Non-QM Asset-Based Loans
There is more than one way assets may help a retiree qualify.
Conventional Financing
Certain conventional guidelines allow eligible assets to be converted into qualifying income when specific requirements are met.
This can be useful because the borrower may still receive the benefits of conventional financing while using assets as part of the income calculation.
However, the rules can be fairly specific.
Non-QM Financing
Some non-QM lenders offer their own asset-based qualification programs.
Those programs may evaluate assets differently from conventional financing and can sometimes work for borrowers who do not fit standard agency guidelines.
The tradeoff is that non-QM financing can have different rates, fees, down-payment requirements and underwriting standards.
A non-QM loan should not automatically be the first choice just because someone is retired.
I would first look at whether conventional or another traditional mortgage program works, then compare alternatives when they are useful.
Should Retirees Pay Cash for a Home Instead?
Maybe—but having enough money to pay cash does not automatically mean you should.
Some retirees prefer owning their home without a mortgage.
Others finance part of the purchase because they want to preserve liquidity rather than putting a large percentage of their available assets into the house.
Things to consider include:
How much cash you want available after closing
Your comfort with a monthly mortgage payment
Potential taxes from selling investments
Potential taxes associated with retirement withdrawals
Your emergency reserves
Other planned expenses
Estate or financial-planning goals
The cost of the mortgage
The potential consequences of taking money out of investments
This is where your mortgage professional, CPA and financial advisor have different jobs.
I can show you what different down-payment and financing structures look like on the mortgage side.
Your CPA or financial advisor can help you evaluate the tax and investment consequences of moving or liquidating assets.
A Large Down Payment Is Not Always the Only Answer
Retirees sometimes assume:
"I'll just put more money down so I can qualify."
That may work, but it is not always the only strategy.
Before liquidating investments or moving a large amount of money, it can make sense to compare:
A larger down payment
A smaller down payment with more reserves
Regular retirement distributions
Asset-depletion qualification
Conventional financing
Jumbo financing
Other eligible mortgage programs
The goal is to find a structure that qualifies while also fitting your broader financial plan.
Mortgage Options for Retirees
Retirement does not create a separate category of mortgage.
Retirees can potentially use many of the same mortgage programs as other borrowers if they meet the applicable requirements.
Conventional Loans
Conventional loans can work for retirees buying a primary residence, second home or investment property when the borrower and property meet the applicable guidelines.
Jumbo Loans
Retirees purchasing higher-priced homes may need jumbo financing if the loan amount exceeds the applicable conforming loan limit.
Jumbo programs can have their own income, asset and reserve requirements, which can vary considerably between lenders.
My guide to conforming vs. jumbo loans explains the difference.
FHA Loans
FHA financing can also be used by retirees purchasing an eligible primary residence.
Retirement does not prevent someone from qualifying for FHA financing.
VA Loans
Eligible veterans, service members and certain surviving spouses may still use VA home-loan benefits during retirement.
VA financing may allow an eligible borrower to purchase without a required down payment, subject to VA and lender requirements.
Second-Home Financing
Some retirees purchase a second home at the coast, in the mountains, at the lake or closer to family.
Second-home financing has different occupancy and eligibility requirements from financing an investment property.
If you expect to rent the home, make sure you discuss those plans before choosing the loan program. How you intend to use the property matters.
What About Reverse Mortgages?
Reverse mortgages are another category entirely.
The FHA-insured Home Equity Conversion Mortgage, or HECM, is available to eligible homeowners age 62 and older and can be used in certain circumstances to access home equity or purchase a home.
Unlike a traditional mortgage, a HECM generally does not require monthly principal-and-interest payments.
However, the homeowner remains responsible for obligations such as property taxes, homeowners insurance and maintaining the property.
Reverse mortgages also involve their own costs, qualification requirements and long-term considerations.
Federal rules require prospective HECM borrowers to complete counseling with an approved housing counselor.
Because reverse mortgages work very differently from traditional financing, they should be evaluated separately rather than treated as simply another version of a conventional mortgage.
Downsizing or Buying Before Selling Your Current Home
Many retirees are not first-time buyers.
You may be selling a larger home and moving to:
A smaller house
A townhome or condo
A one-story home
A 55+ community
A home closer to children or grandchildren
The lake
The coast
Another part of North or South Carolina
One challenge is timing the sale of your current home with the new purchase.
If you want to buy before selling, the mortgage strategy may depend on whether you can qualify while carrying the existing property and whether you need its equity for the new purchase.
Potential strategies depend on the situation and may include using available assets for the purchase and later applying proceeds from the old home toward the new mortgage.
My guide to buying in Charlotte before selling your current home explains several considerations for move-up and relocation buyers.
Property Taxes for Older Homeowners in North Carolina and South Carolina
Property taxes can matter considerably when comparing where to live in retirement.
North Carolina and South Carolina handle property taxes differently, and both have programs that may provide property-tax relief to eligible older homeowners.
Eligibility can depend on factors such as:
Age
Disability status
Income
Property use
Ownership
Residency
Application deadlines
These programs can change, and eligibility is specific to the homeowner and property.
Do not assume a tax benefit will automatically apply when estimating your future housing expense.
My guide to North Carolina vs. South Carolina property taxes explains the broader differences between the two states.
For a specific exemption or relief program, verify current requirements with the county tax office where the property is located.
For example, South Carolina offers a homestead exemption that excludes the first $50,000 of a primary residence's fair market value from property taxes for homeowners 65 and older, in addition to the 4% owner-occupied assessment ratio. North Carolina offers an elderly and disabled exclusion and a circuit breaker program for qualifying homeowners 65 and older, with income limits. You must apply for these programs.
Where Are Retirees Buying Around Charlotte?
Retirees and downsizers considering the Charlotte region have a wide range of options on both sides of the state line.
Depending on the type of home and location you want, you might compare areas such as:
There are also active-adult and age-restricted communities throughout parts of North Carolina and South Carolina.
Rather than assuming one area is better for retirees, compare the things that matter to your particular move:
Property taxes
HOA dues
Homeowners insurance
Home type
Maintenance responsibilities
Proximity to family
Transportation
Healthcare access
Your preferred lifestyle
If you're relocating to the area, my Moving to Charlotte mortgage guide is another good starting point.
For coastal, lakefront or other properties with additional insurance considerations, make sure you understand homeowners, wind and flood-insurance costs when applicable before deciding what monthly housing expense works for you.
Common Mortgage Mistakes Retirees Should Avoid
Assuming You Cannot Qualify Because You Retired
Retirement itself does not disqualify you.
The question is how your post-retirement income and assets fit the available mortgage guidelines.
Retiring Immediately Before Buying Without Reviewing the Mortgage First
If you are currently employed but plan to retire before or shortly after closing, discuss that change with your mortgage professional.
Qualification needs to reflect income that can appropriately be used under the loan program.
Moving Money Around Without a Plan
Retirees often have money spread across several retirement, investment and bank accounts.
Large transfers are not necessarily a problem, but they can create additional documentation.
Talk through the plan before moving or liquidating assets needed for the transaction.
Liquidating Investments Before You Know You Need To
Do not assume you must sell investments or take a large retirement distribution before the mortgage options have been reviewed.
First determine what the lender actually needs.
Then discuss any tax or investment consequences with the appropriate financial professional.
Putting Too Much Cash Into the House
A large down payment can reduce the mortgage, but it also reduces your liquid assets.
Think about how much you want available after closing for emergencies, healthcare, travel, family and other expenses.
Comparing Only Interest Rates
Compare the complete financing structure, including:
Rate
APR
Discount points
Lender credits
Origination charges
Mortgage insurance when applicable
Estimated payment
Estimated cash to close
Reserves remaining after closing
Questions Retirees Should Ask a Mortgage Professional
Before choosing a mortgage, ask:
How will you calculate my Social Security income?
Can any of my nontaxable income be grossed up?
How will my pension or annuity be documented?
Can retirement-account distributions be used?
Do any of your lenders offer asset-depletion qualification?
Which of my assets are eligible?
Will retirement assets be discounted for qualification?
How much will I need to keep in reserves?
Can you compare a larger down payment with an asset-based qualification strategy?
Will you review my documents before I make an offer?
For retirees with significant assets, I would specifically ask whether the mortgage professional has experience with asset depletion, not just whether they work with retired borrowers.
How I Work With Retired Homebuyers
Before moving into mortgages, I worked as a Realtor and as an on-site new-construction sales agent for homebuilders.
Today, as a mortgage broker, I can compare options from multiple wholesale lenders rather than trying to fit every retired borrower into one lender's approach.
I start by understanding:
Where you want to move
Whether you are selling another property
Your comfortable monthly housing expense
Social Security and pension income
Retirement distributions
Investment and retirement assets
Debts
Cash you want to keep available after closing
Then I review the documentation and compare appropriate financing strategies.
For one retiree, the straightforward answer might be conventional financing using Social Security and pension income.
For another, it might involve documenting retirement distributions.
For someone with significant assets but relatively little monthly income, an asset-depletion calculation may be worth exploring.
When you find a property, I prepare a Total Cost Analysis so you can see the estimated payment, taxes, insurance, HOA dues and cash to close for that specific home.
You can also read feedback from past clients on my reviews page.
Mortgage FAQs for Retirees
Can a Lender Deny Me a Mortgage Because I'm Too Old?
A creditor generally cannot discriminate against an applicant because of age under federal fair-lending law.
Age can be relevant in limited circumstances permitted by law or when it relates to a particular program, but you cannot simply be denied a traditional mortgage because a lender thinks you are too old for the loan term.
Can I Get a 30-Year Mortgage at Age 70?
Potentially, yes.
There is no general rule requiring the mortgage term to end before a certain age.
You still need to meet the applicable income, credit, asset, property and underwriting requirements.
Do I Need Two Years of Retirement Income History?
Not necessarily.
Different types of retirement income have different documentation and continuation requirements.
Social Security, pension, annuity and retirement-account distribution income should each be evaluated according to the applicable mortgage guidelines rather than assuming every retiree needs two years of history.
Can I Qualify for a Mortgage Using My Savings Instead of Employment Income?
Possibly.
Certain mortgage programs allow eligible assets to be converted into qualifying income using an asset-depletion calculation.
The assets that qualify, calculation method and other requirements depend on the program and lender.
Should I Take More Money Out of My IRA Before Applying?
Not without discussing the mortgage strategy first.
A larger distribution may not be necessary, and changing withdrawals or liquidating assets can have tax or investment consequences.
Review the mortgage options first and consult your CPA or financial advisor when appropriate.
Is a Mortgage Broker Helpful for a Retired Borrower?
It can be.
Different wholesale lenders may have different products, overlays and approaches to retirement income and asset-based qualification.
As a broker, I can compare the lenders and programs available to me rather than offering only one institution's mortgage products.
That does not guarantee qualification, but it can provide more options to evaluate.
Planning to Buy a Home in Retirement?
If you're buying a home in retirement in North Carolina or South Carolina, we can start by reviewing how your income and assets may be treated before you make an offer or move money around.
Bring the complete picture—Social Security, pensions, retirement accounts, investments, current real estate and the amount of cash you want to keep available after closing.
Then we can compare the mortgage options that may fit your situation.
Schedule a mortgage consultation if you want to talk through the strategy first.
If you're ready for a full mortgage review, you can also start your mortgage application.
Paul Mattos
Mortgage Broker | Refine Mortgage
Carolina Home Financing
NMLS# 2339069
Licensed in North Carolina and South Carolina
Call or text: 980-221-4959
Email: paulm@refinemortgage.net
Refine Mortgage Inc. | NMLS# 2417960 | Equal Housing Lender
This article provides general educational information and is not a commitment to lend, a rate quote, an offer of specific credit terms, or tax, legal or investment advice. Mortgage programs, guidelines, pricing and lender requirements can change. Qualification depends on the borrower, property, selected loan program and underwriting approval. Tax programs and asset-based qualification requirements vary. Not all applicants will qualify.
