You typically must be at least 18 years of age to get a mortgage, but there's no maximum age limit. In fact, mortgage discrimination because of age is illegal under the Equal Credit Opportunity Act. Whether you're 20 or 90, lenders are supposed to qualify you based on your ability to pay, not your age. The sole exception is a reverse mortgage, which requires that a borrower be 62 or older.
A mortgage is a legal document, so you must be old enough to sign and be held legally responsible. The age when you can sign contracts is called the age of majority. It varies by state law, but it's 18 in most states, according to US Legal. The exceptions are Alabama and Nebraska, where's it's 19, and Colorado and Mississippi, where it's 21, according to Law Library. Lenders won't give you a mortgage until you can be held to the agreement.
Qualifying at Any Age
Mortgage lenders qualify you for a loan amount based on your ability to make the payments, no matter what your age. According to Bankrate, some major factors include:
how much of your income will go to the mortgage and related costs
and how much your income will go paying all debts, including the mortgage
Each lender has its own standards for qualifying buyers. However, all your debts, including the mortgage, credit cards and car payments, for example, shouldn't take more than 36 percent of your gross income for a conventional loan. For a Federal Housing Administration or Veteran's Administration mortgage, you're allowed 41 percent of gross income for all these payments.
- Older people, even retirees, can qualify for a mortgage if they have enough income to meet the lender's standards. In addition to paychecks from work, banks count pensions, Social Security, rental income, interest and investment returns, such as stock dividends.
- Older Americans can qualify for any type of mortgage, including a Veterans Affairs mortgage, Federal Housing Administration mortgage or a conventional mortgage. The length of the mortgage doesn't matter either. People over 60 or 70 can qualify for a 30-year mortgage.
Reverse mortgages are especially designed for older people who lack income and want to draw on home equity to help with day-to-day expenses. You must be at least 62 years of age for a reverse mortgage, and you must reside in the home. Also called Home Equity Conversion Mortgages, reverse mortgages provide monthly payments during your lifetime.
Qualifying requires owning your home free and clear or with a low mortgage balance, according to the U.S. Department of Housing and Urban Development. You must also have enough additional income to pay the taxes and insurance on your home.
When you die or sell your home, the balance due on a reverse mortgage must be paid in full. This reduces what your heirs may receive. If the house is worth less than the balance due at your death, the debt isn't passed on to your heirs.
- Bankrate: You're Never Too Old for a Mortgage
- Home Buying Institute: 2013 FHA Eligibility Rules; Who Is Eligible for Government Insured Loans? Read more: http://www.homebuyinginstitute.com/news/2013-fha-eligibility-rules-341/#ixzz3bqRsZhqW
- US Legal: Age of Majority Law & Legal Definition
- Federal Trade Commission: Your Equal Credit Opportunity Rights
- Bankrate: How Much House Can You Buy?
- HUD.gov: Requently Asked Questions About HUD's Reverse Mortgages
- The Wall Street Journal: Can a Retiree Get a Mortgage?
- PBS News Hour: Does It Make Sense to Get a 30-Year Mortgage at Age 66?
- Law Library: Legal Ages Laws
- FHA.com: FHA Loan Articles
- Veterans United Network: Explaining the VA's Standard for Debt-to-Income Ratio