In the United States, many individuals and families aspire to dream their American dream. If you are also aspiring to own a home, getting a mortgage seems like the plausible next step. 

There are various factors that lenders consider when determining your mortgage eligibility, and age is one of the most important of them. Yes, your age is just a number which may or may not disqualify you from getting a mortgage. 

How? Well, for starters, it can influence the terms and conditions of the loan you’re offered. In this blog, we’re about to explore how your age can affect your mortgage eligibility and terms you’re offered.

When it comes to securing a mortgage, age can be a factor, but it’s not necessarily a barrier. Traditional mortgage lenders often have age restrictions that can impact eligibility for certain loan products.

However, if you’re considered a non-traditional borrower or fall outside standard lending criteria due to age or other reasons, alternative options like Non-QM (Non-Qualified Mortgage) loans may be available.

Non-QM loans are designed for borrowers who don’t meet the stringent requirements of conventional mortgages. These loans consider various factors beyond age, such as credit history, income stability, and debt-to-income ratio, to assess eligibility.

Unlike traditional mortgages, Non-QM loans offer more flexibility and cater to individuals who may be self-employed, have irregular income, or are looking for specialized financing options.

Minimum Age Barrier

Okay, let’s talk about something important – how old you need to be to get a mortgage. There isn’t a specific age that’s perfect for everyone. 

 

But, to sign a mortgage contract, you have to be at least 18 years old. So, if you’re still a teenager, you’ll need to wait a bit before you can start thinking about buying a house.

Credit History 

Lenders check your credit history to see if you’re good at managing money. 

 

If you’re younger, you might not have much of a credit history yet. This might worry the lenders if you have enough financial responsibility to be able to pay back a loan. 

 

If you’re older, you might have a good credit history showcasing your financial responsibility. But negative marks or financial missteps could still impact your eligibility. It could still make it tricky for you to get a loan.

Income Stability 

Lenders check if you have a steady income to make sure you can pay your mortgage on time. If you’re younger and haven’t been a working professional for long, lenders might worry about the stability and reliability of your income. 

 

On the other hand, if you’re older and close to retiring, lenders might want to scrutinize you for the stability and longevity of your income. If you have been self employed all your life, then your credit profile may not be a traditional one and you might face problems proving your income stability.

 

In such a case, talk to your loan officer and look for options like Non-QM loans. These are for people who have unique income streams and may not meet the eligibility of standard loan programs. 

Retirement Status

For people who are close to retiring or already enjoying their retirement, banks and lenders look at the money you’ll be getting from retirement and the things you own. 

 

They want to make sure you have enough money to pay for your mortgage and other money responsibilities. 

 

Making a good plan for your retirement can be like having a strong shield to protect your ability to get a mortgage.

Age Discrimination

Even though age discrimination in lending is illegal under the Equal Credit Opportunity Act (ECOA), some lenders might still think about how old someone is when deciding whether to give them a loan. 

 

But they’re allowed to think about other things, like income, credit history, and Debt to Income ratio. 

 

These things can be indirectly connected to age, hence, they become noteworthy and can affect your mortgage eligibility.

The Bottom Line

How old you are, matters. But it’s not the only thing that lenders look at. They also think about other stuff like your financial stability and your ability to repay the loan. They can also consider if you owe money to others, and if you are able to manage your debt responsibly. 

No matter how old you are, having a steady income, good credit score, and debt responsibility are important for getting a mortgage. Consult United1 Mortgage if you need help figuring out which type of loan best for you and your situation.

In conclusion, while age can impact mortgage eligibility with traditional lenders, Non-QM loans provide a viable alternative for borrowers who may not meet standard criteria due to age or other unique circumstances. If you’re exploring mortgage options and have concerns about age-related restrictions, consider exploring Non-QM loans tailored to your individual financial situation.