Older Adult Deed Holders at Work: We See You

Working past “retirement age” has gone mainstream. Twelve million people aged 65+ continue to work.

Many hang onto their deeds. And this includes deeds to every kind of home. Baby boomers without children present now own more 3+ bedroom homes than millennial parents with children.

In the past year, for the first time ever, the 70+ age bracket holds a larger share of U.S. real estate wealth than the 40-54 age bracket. With about $15 trillion in real estate, these older adults hold more than a quarter of all wealth that deeds represent.

Fact: Seniors Buy Homes

Seniors are buying, and they know exactly what they want. For many, this entails:

• Good healthcare and local services.

• Transit networks.

• Restaurants, cafes, book shops, libraries, and parks.

• Working or co-working spaces.

Inside the homes, they tend to look for:

• Safety features and ease of mobility.

• A low-maintenance interior and exterior.

• Dedicated home office space, with plenty of outlets and good lighting.

• Smart-home technology that’s simple to figure out and use.

These factors may matter more than home size. All in all, sellers that want to include older home hunters should focus on the ways in which the home supports continued work and aging in place. Older adults want to know they can make the most of their home now, and later. Sellers need to show older buyers how their homes can fit the bill.

Fact: Seniors Are an Underrated Class of Borrowers

Older adults’ real estate wealth is at an all-time high. Plus, many have taken on consulting roles, and some run their own home-based businesses. They need suitable homes, and they may need to finance or borrow against their homeownership.

Yet the mortgage system is not designed for them. It fails to fully appreciate the older adult whose financial strength is made up of assets, savings, and a multi-decade record of good credit.  

Borrowing against home equity can help some older deed holders. (Granted, borrowing isn’t always the perfect answer when interest rates keep rising.) Why might they wish to borrow? It might be for a roof replacement, or a new heating and air conditioning system. They could need to cover a medical bill that Medicare doesn’t cover. Or they might want to install accessibility features in their homes. Some want to take advantage of the legal trend supporting accessory dwelling units, and add one to their property for a family member.

And seniors have a lot of equity to tap. Today, 54% of baby boomers hold their deeds free and clear.

But their financial profiles are viewed through underwriting systems that undervalue the senior applicant. Loan underwriting focuses on pay stub-based rules. This standard can undervalue the ways many older adults tend to work, as well as their mix of retirement and working income. Experienced mortgage consultants know. There’s a term—asset-depletion underwriting—that lenders use for understanding assets as tantamount to income for the purpose of approving a loan application.

To quote Gerald M. Green, founder of the Veri-Search^TM underwriting service, older adults with assets shouldn’t be “forced to navigate a patchwork of credit cards, high-cost loans, deferred maintenance, family pressure or poorly explained financial products.”

Seniors might need to shop around for mortgage consultants experienced in working with older borrowers, and with applicants who don’t receive W-2s.

Note to our readers: Deeds.com does not have any affiliation with, or intend to endorse, companies mentioned or cited in this article. Neither this website nor any other provides case-specific financial advice. Consult with your local professionals for individualized guidance.