Mortgage Options for Retirees on a Fixed Income in Minnesota

By Rob Gintner

Rob assists people who want to ensure a smooth and efficient transition into a better space to call home, allowing them to embrace a more fulfilling lifestyle.

If you’re a Minnesota retiree considering a move, you’ve likely heard the myth: you can’t get a mortgage without a regular paycheck. This single misconception stops many from downsizing and achieving their ideal retirement lifestyle.

To clear the confusion, we sat down with expert lender Lisa Walker of CrossCountry Mortgage for a direct Q&A. We tackle the four most critical financing questions head-on, providing clear, actionable answers to help you move forward with confidence.

1. Mortgages for retirees: How do you qualify on a fixed income? The good news is that getting a mortgage in retirement is not only possible, but often a strategic financial move. Lenders can qualify you using your documented fixed income streams, such as Social Security, pension payments, and Required Minimum Distributions (RMDs) from retirement accounts. “Many of our retirees are actually taking out small mortgages,” Lisa explains. “This lets them keep more assets liquid for cash flow and emergencies, while securing a manageable monthly payment they can pay off anytime.”

The goal isn’t to drain your savings for a cash purchase, but to structure a loan that supports your long-term financial health.

2. Bridge loans: What are the smarter alternatives to time your sale? The challenge of buying a new home before selling your current one is real. While bridge loans exist, Lisa advises that they are often expensive, with fees that reflect their short-term nature. A more strategic approach is planning. “We often suggest establishing a Home Equity Line of Credit (HELOC) on your current home before you list it for sale,” she says.

This provides flexible, lower-cost down payment funds. However, you cannot open a HELOC on a property that is already listed for sale. Another option to discuss with your financial advisor is a short-term loan against a retirement account, which can sometimes be more cost-effective than a traditional bridge loan.

3. Buying a home without a full mortgage: Is paying all cash the only way? Paying all cash is one path, but it’s rarely the only or best option for preserving financial flexibility. The strategies above, using a small mortgage or a HELOC, allow you to buy without committing all your capital. This is crucial for retirees who need to maintain cash reserves for living expenses, healthcare, and opportunities.

The key is to shift your mindset from “How much can I pay?” to “What financing structure gives me the most security and freedom?” A thoughtful mortgage can be a tool for wealth preservation, not just a necessary debt.

4. Reverse mortgages: When does a reverse mortgage for purchase make sense? A reverse mortgage for purchase allows eligible buyers (typically 62+) to buy a new home without monthly mortgage payments, using the equity from their previous home. It’s a powerful tool in specific circumstances, but requires deep due diligence. “Reverse mortgages are the absolute epitome of where communication is needed,” Lisa stresses. “You must involve the entire family, as it impacts inheritance and long-term equity.” They also have strict requirements regarding age, income, and the home’s value. For some, it’s a perfect solution to eliminate a monthly payment; for others, a small conventional mortgage is simpler and more aligned with their estate planning goals.

The key takeaway is that you have options. The goal isn’t just to get a loan, but to find the right financial match for your short- and long-term needs, focusing on both upfront costs and ongoing monthly payments.

If you’re a retiree in Minnesota looking to downsize and want to build a plan based on your unique financial picture, the right team makes all the difference. For a personalized home-buying strategy, call (612) 251-9311, email rob@rghteam.com, or visit www.robgintnerhomes.com.

For expert lending guidance, connect with Lisa Walker of the CrossCountry Mortgage Team at 952-920-0322 or visit crosscountrymortgage.com.

Your ideal retirement home isn’t out of reach; you just need the right key to unlock it.