Getting a foot on the property ladder is tough, but it’s not likely to get much easier as you get older.
At least that is according to a report by the Sydney Morning Herald, which noted the difficulties faced by aging first home buyers.
According to the report, the average age of first-time buyers in Australia went up from 27 years old in the early 1990s to 29 in the early 2000s. In December 2017 the average age had risen to 31 based on figures from ING.
Unfortunately for those living in Sydney and Melbourne, the age of first-timers is likely to be even older still, given the rate of price growth in these cities.
The good news is that there is no firm age limit on home loan eligibility, however lenders may be reluctant to approve borrowers if their home loan term runs past the retirement age, so getting approval may start getting harder from about 45- 50.
An older borrower can improve their desirability to lenders by providing an exit strategy that shows how they will be able to meet their repayments in retirement.
Kirsty Lamont, a director of comparison site Mozo, says that this could include a superannuation payout, investment property income or income from the sale of shares.
Another exit strategy that may be acceptable to lenders is to eventually downsize from a free-standing house to an apartment.
You’re never too old
All in all it’s not doom and gloom if you’re a first home buyer over 40, but things will be much easier if you can get into the property market sooner rather than later.
There’s no better time to jump into the market than the present, with low interest rates and property prices stabilising in Sydney and Melbourne.
If you’re over 40 (or under) and would like to discuss your home loan options then feel free to get in touch with Professionals Finance.