How old is too old?
That’s the big question confronting many borrowers when they hear the news that they can’t borrow as much as they had hoped for or that the repayments are higher than they had expected because of their age.
This is one of the consequences of legislation that was introduced a few years ago that led to a much greater focus on the age of the borrowers and now some lenders will regard you as being too old if you have hit the ripe old age of 50 and want a home loan for a place to live in.
Insisting that a loan be repaid over a shorter period of time will either impact the amount that someone can borrow, the amount that they have to repay or a combination of both and may often result in the person walking away from their plans.
The good news is that there are huge variations in the stance that different lenders have taken regarding this issue as we found when we were recently approached by a 51 and 53 year old couple looking to build their own home.
As part of the research process that we work through, we worked with the lenders on our panel to see what they would offer and have listed just four of these along with the responses from them and the impact on the amount that could be borrowed.
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It is an amazing difference and well worth pursuing.
The good news is that if you are buying for investment, the rules are much easier!