Q: I’m 71. How hard will it be for me to get a mortgage?
A: There is absolutely nothing about your age that should interfere with your ability to obtain a mortgage. There can be some complications with income, but let’s get you up-to-speed on your rights and give you some thoughts on how to approach this lifestyle transformation.
Need-to-Knows
In fact, the federal Fair Housing Act of 1968 was implemented with the express intent to prevent discrimination — it protects your right to own, sell, purchase and finance a home without the fear of being discriminated against because of your age or source of income.
Any of the following are unlawful, under the Fair Housing Act, if based on age (or any other of a long list of protected classes):
- Refusal to make a mortgage loan;
- Refusal to provide information regarding loans; or
- Imposing different terms or conditions on a loan, such as different interest rates, points or fees.
In fact, one of the only forms of housing discrimination that is legal is the exclusion of permanent residents under 55 in senior housing communities. If you’re interested in living in such a complex or subdivision — some people love the idea, others think it’s awful — you might consider talking with their in-house real estate and/or mortgage professionals, who might offer special expertise and loan programs that are well-suited to the complicated income documentation challenges some seniors face.
The bigger issue people in your age bracket often run into is the ability to document sufficient income to buy anything worthwhile in your area, especially if you’re trying to stretch a fixed income on the reduced debt-to-income ratios we’re seeing these days. You don’t mention where your income comes from, but here are some general rules. …CONTINUED
If you’re still working, then nothing about your mortgage application is any different than any other mortgage applicant who has similar qualifications. If you are retired and your income includes a pension, veteran’s benefits or Social Security, these are also valid income sources for a loan application.
The Fair Housing Act not only prohibits discrimination based on age, it also prevents real estate professionals, mortgage brokers and lenders from treating your loan application differently based on the source of your income (so long as your income is legal, verifiable and paid to you).
With that said, you can be refused a mortgage or have your loan amount limited if you don’t have sufficient income — just like any other mortgage applicant. If you feel you are being discriminated against by a real estate or mortgage professional on the basis of your age, contact a legal aid nonprofit in your town for low- or no-cost help.
And one more thing: You didn’t specify whether you’re looking for a mortgage to buy a home or to refinance your existing home. If you have a home with abundant equity in it and you need to pull cash out but are concerned about creating a new payment, look into a reverse mortgage — a loan available only to seniors.
There are many strong opinions pro and con about these loans, which will give you the cash you need, with no payments, in exchange for title to the property after you pass away — even if that’s 40 years from now. Nevertheless, some people have found reverse mortgages to be a godsend, so it’s worth looking into if it makes sense for your situation.
Mindset Management
I’ve worked with buyers/borrowers your age and older who met with resistance from those around them at the prospect of making real estate moves. My opinion? Nine times out of 10, these objections are hogwash — they have more to do with the limiting thinking of the objector than they do about you. If you can’t do exactly what you want and need to do at 71, when will you ever be able to?!
A friend of mine who is an insurance agent recently told me that her company had just revised all of their policy contracts because so many of their insureds were living way past 100 years, which was the former contract cutoff.
If you’re planning on buying a home, I’d encourage you to check out Barbara Corcoran’s latest book, "Nextville: Amazing Places to Live the Rest of Your Life" (Grand Central Publishing, 2008). It offers smart, off-the-grid guidance on planning your next home purchase to manifest whatever your vision of the next phase of your life is.
Action Plan
The only discrimination I want you to experience is to be discriminating in your choice of professionals. If you work through these suggestions and still have a hard time, or just want someone to chauffeur you directly to the resources you need, contact a local real estate agent who has earned the Senior Real Estate Specialist designation at SRES.org.
Tara-Nicholle Nelson is author of "The Savvy Woman’s Homebuying Handbook" and "Trillion Dollar Women: Use Your Power to Make Buying and Remodeling Decisions." Ask her a real estate question online or visit her Web site, www.rethinkrealestate.com.
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