How Old Is Too Old To Take Out a Mortgage?

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Welcome to Ask Clark, a column designed to answer your financial questions, by money expert Clark Howard.

What Age Is Too Old To Get a New Mortgage?

Melinda from Minnesota says: ”How old is too old to take out a mortgage? My 86-year-old widowed mother would like to buy a townhome but does not want to sell her home until she’s settled, in three to six months. 

“It’s paid off and is worth about $225,000. She has liquid assets of about $200,000. She would need an additional $50,000 in closing costs. She has a monthly retirement income that more than covers her expenses.”

Clark’s Take on an Elderly Person Taking Out a Short-Term Mortgage

Clark says: “From a strictly financial standpoint, it would make more sense for her to rent moving forward than to buy a place. But if she wants to buy a place, she’s going to have meaningful closing costs on the money that she would have to borrow.”

When it comes to selling her home, Clark has the following advice:

“What I would do is I would take out at extremely low-cost home equity line of credit on the existing home. It would be short-term money.”

Clark is in favor of using home equity lines of credit (HELOCs) when the money goes into a home, as in this situation of buying a townhome, but not when you use the money for other debt.

In this case, the woman can actually save money with a HELOC: “It would not have the normal hassles or closing costs that would be involved in taking out a mortgage for a short period of time on the townhome,” Clark says.

To hear Clark’s full take on this question, listen to the segment:

Do you have a question for Clark? Use this form to ask him! And remember that you can listen to the Clark Howard Podcast at any time here.

If you have a question but don’t want to go on the air, contact Clark’s Consumer Action Center for free money help.

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