We are planning on retiring in less than two years. We both currently work and both of us will have state and military pensions at full retirement and Social Security. When we buy a new house in NC, is the ability to pay based on when we apply while working or what we will be making at retirement? We are fine either way as we will have a good retirement income, gain from old house, and no other bills. Also, can a lender limit our loan (30- or 15-year) based on our age. I would be 65 and my wife would be 61. – Dennie


Wow, its sounds like you’ve set the stage for a financially stable retirement! When you buy your new home the lender will review your application based on your credit and income situation at the time you apply for the loan. Age should not play any role (there’s a law against it!) in the processing of your application or the choice of loan. Of course, you’ll want to make sure you’re buying a home that is affordable now and forever. A good rule of thumb is to limit your total housing costs (principal, interest, taxes, and insurance) to less than 28 percent of your gross income. To do that you may have to pull some cash out of pocket to lower the monthly financial commitment. Because you, even if your lender doesn’t, should make this calculation based on your retirement income.