Can I Be Too Old or Too Young to Get a Mortgage?

A miniature houseYou could apply for a mortgage regardless of your age, as indicated in the ECOA or Equal Credit Opportunity Act. This means that no lender may turn you away, no matter your age, just as long as you’re 18 years and above.

However, this doesn’t necessarily mean that they’re required to approve your mortgage applications because the usual qualification requirements still apply to you. So what are these requirements? Mortgage Investors Group, home to expert loan officers in Oak Ridge, tells us.

1. Your Credit Score

Your credit score will communicate to lenders if you’re a high- or low-risk borrower. If you have a high credit score, which it must be if you don’t have lots of debt and you always pay your bills on time, lenders would be more willing to work with you, whether you’re 20, 64, or 91.

2. Your Debt-to-Income Ratio

You must be able to demonstrate to lenders that you could comfortably afford your monthly payments regardless of your age. Generally speaking, lenders would want your total monthly debt load, which includes your potential home loan payments, to be around 36% of your gross income every month.

Additionally, your overall monthly housing bills, which include interest, insurance, and taxes, must be about 28% of your gross monthly earnings. Your chances of being approved for a mortgage would be higher if you could show prospective lenders that you have a healthy debt-to-income or DTI ratio.

3. Your Monthly Income

You need to show proof of your income so that lenders could estimate your DTI ratio. For a lot of borrowers, their income comes from monthly salaries, but this isn’t typically the case with some borrowers, who are perhaps around 70–80 years old and retired.

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If you fall in this category, you could use other income sources such as your Social Security payments, as well as income from your retirement plan, pension, investments, and payments from royalties or legal settlements.

What You Need to Consider

If you think that you qualify as a low-risk borrower, don’t be afraid to apply for a home loan just because of your age. You do however need to understand and take into careful consideration the specific age-related factors when thinking of getting a mortgage. For example, how much down payment you could afford to put down and how long are you planning on staying in the home among others.