How to increase your chances of Home loan approval
But what about your age?
And what effect does age have on your borrowing power?
What is the maximum home loan age?
“However” lenders also have a responsibility to ensure that anyone they lend to can comfortably afford to repay the loan without experiencing any undue financial hardships. With this in mind, the older you are, the more difficult you might find it to obtain home loan approval.
In the past, Australian lenders did not place any age limits on their mortgages. However over the past couple of years a number of lenders, have introduced limits on their home loans to borrowers over 50 years of age loans, there for reducing the loan time allowed up until retirement.
What does this mean and how does this affect you?
Why are lenders reluctant to lend to older borrowers?
If you’re an older Australian and you apply for a home loan, the lender will assess your application in the same way they would for an application from an 18-year-old or a 38-year-old. “If” you have your finances in order and can demonstrate your ability to repay the loan, your application can be approved.
If you feel you are being discriminated against you can contact AFCA click here for the link or call 1800931678 to discuss your concerns they are there to help you.
How to get your loan application approved
- Exit strategy. Most lenders will require the borrowers over 50 to supply a home loan exit strategy, this basically outlines what will happen to the home loan when you retire. And how you intend to pay down debt upon retirement. In addition to the usual information required in the application process you will also need to show how you will continue to pay off your loan during retirement. For example, you may need to sell an investment property to pay down your debt.
- Minimise debt. The amount of debt you have is a very important factor a lender will take into account when assessing your loan application. Pay down existing debt before you apply to increase your chances of approval.
- Save a bigger deposit. The more money you have saved, the more money the bank will be willing to let you borrow. If you can display proof of genuine savings and regular financial discipline, your borrowing power will increase dramatically.
- Credit history. Are there any black marks on your credit file?
- Provide more financial evidence. If you’ve successfully repaid a previous mortgage, including this in your application will show that you’re a reliable borrower. A sizable superannuation balance can also help to convince a lender that you don’t pose an unacceptable lending risk.
- Ask an expert. The most important piece of advice for older Australians hunting for a home loan is to ask a mortgage broker for help. A broker will be able to help you find the lender and loan most suitable for your needs, and can offer advice and assistance on how you can put together the best possible loan application to present to Lenders.