The good news is life begins at forty. The bad news is once you reach that milestone, you could struggle to get a mortgage. That’s what many prospective home-buyers have reported, believing age was a factor in their failed mortgage applications. Here’s why it has become an issue in recent years and what you can do about it.
Why banks are reluctant to give mortgages to the over 40s
According to research carried out by Nottingham Building Society, 25 per cent of those turned down for a mortgage said it was because they weren’t allowed to borrow for a long enough period or that they or their partner were deemed too old. So why would banks be reluctant to turn away older borrowers? The problem arises because many mortgage lenders will only give a mortgage for a period up to someone’s planned retirement date. With most loans set for a period of around 25-30 years, a 45-year-old borrower’s mortgage term would take them up to the age of 70 or 75, well into their retirement.
Meanwhile, financial regulations state a lender must know a borrower is able to pay back a loan before lending the money.
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