Whether you’re 20 years old or a few times that, you might be thinking about buying a house. And why not? Homeownership is chock full of benefits no matter your age. There are, however, some age-based issues to consider before you start looking to purchase a home.
Does age affect a lender’s willingness to approve your home loan?
If you’re worried that you’re too old to qualify for a mortgage loan, you’re in luck. It’s against the law to discriminate based on age, so senior citizens are not at a disadvantage for landing a loan.
For younger potential buyers, the process may be a little tougher, but not specifically because of age. If you’re 18, you can legally enter into a contract in most states. However, it’s common for newly minted adults to have neither the credit history nor the financial means to afford a home.
What are the borrowing challenges for younger people and older people?
Younger people may lack enough of a credit history to have a high enough credit score to get approved for a home loan. In addition, their work history may not be stable enough for lenders to feel confident in lending them money. Many young people are saddled with student loan debt that makes buying a home challenging.
Older adults can run into problems, too. If you are already retired, you may not have the income to purchase a home. Past credit mistakes may haunt you with low credit scores that would derail qualifying for a mortgage. And buying too much home for your budget can wreak havoc on your finances in your golden years.
What are the benefits of buying at a younger age? What are the benefits and ease of securing a mortgage as an older or retired person?
For younger buyers, there are many options for mortgage loans available, like first-time buyer loans. Some of these offer 100% financing and are more lenient on credit scores. Younger people also generally have fewer debts, so managing a monthly mortgage payment (provided you have a good job) may seem easier.
Older homebuyers can reap the benefits of a long, well-managed credit history and a hefty savings account. They may also be able to take advantage of a VA loan or other loan programs geared more toward seniors.
A bad credit mortgage can assist both generations if they’ve made some wrong moves regarding their credit.
Whether you are young or young at heart, there are options available to you and benefits to enjoy from homeownership. Take stock of your needs, set a realistic budget, and move forward with your purchasing plans.
Thinking about buying a home? Contact Mortgage Investors Group for lending advice you can trust. We can provide a borrowing experience specifically tailored to your needs, no matter your age.