If you are approaching the age of 40 and thinking about talking to a mortgage broker so you can buy your first home in a suburb like Kwinana, it may be in your best interest to move fast. While 40 may still seem physically young, lenders tend to judge home loan applications from people 40 and older with a harsher eye than for those younger than 40.

This may seem like discrimination or “ageism” but statistics are on the side of lenders who take age into consideration when looking at a loan application. That reason is retirement age.

The mathematics are simple. Most home loans are for a period of 30 years. If someone is 40 and looking for their first home, they are likely to still be making loan repayments to the age of 70. Since the targeted retirement age is 55, it is mathematically likely that a person who is 70 will no longer be working and earning the kind of money they did at age 40.

The Situation is Still Under Control: For Now…

One generation ago, many Australians were close to paying off their homes by age 40. Now, approximately 20% of first home buyers are older than 40. However, many of those who wait until they are older wish that they had attained market entry when they were younger.

Older people who are buying their first homes may have to jump through more hoops for lenders. For example, your super could become an object of discussion, as could your retirement plans and projected retirement income.

The Process of Borrowing Over 40

Lenders will basically want to know why you waited so long to buy your first home. If you have been overseas for the last 20 years or went through a divorce, lenders may view you more favourably. However, if there are no compelling circumstances and buying a home wasn’t a priority when you were younger, it could be a problem.

One thing that helps: a clean record of paying rent on time. If that rent is close to what your monthly mortgage repayment would be, it can be a positive for you.

Call a Mortgage Broker at Smartline Rockingham Today

To learn more, call us today: (08) 9527 1800.