Once a homeowner reaches retirement, managing a mortgage payment might become difficult with a fixed income.
It is important for all borrowers, especially those on a fixed income, to determine what monthly payment amount is realistic for them and stick to that amount.
A retirees social security income can be grossed up 25% for qualifying purposes on a mortgage loan. This is due to the fact there are no taxes taken out of SS income, unlike a person who works and is W2'ed. Properly grossing up a retirees social security income for a mortgage loan can help you qualify for your home loan. An example of grossing up social security income would be if you were retired and received social security income in the amount of $1000/month. You could gross this income up 25%, which would be $250 more per month. So your income used to qualify you for your mortgage loan would $1,250.
If your credit is strong enough and your Loan to Value is low, almost all programs are available to retired borrowers with very little paperwork required. There are "fast and easy" programs available that allow for a very smooth refinance of your mortgage if you fit the criteria.
There are some lenders out there that will allow you to state the income for retirees. Depending on the lender, they may require proof of the award letter with the income amount whited out.
One option for retired homeowners with equity in their home is an FHA reverse mortgage.