Why Buying a House Before the Age of 40 is Important

What do you mean buy a house before I’m 40? I wasn’t made aware of any stop clock ticking away ominously in the background and counting down the years for the ‘right time’ to buy a home? While there’s sometimes never a ‘right time’ to buy your own property, there certainly is a time where it’s more advisable.

So why before 40? This isn’t an ageist discrimination, the banks and other home loan lenders actually have a legitimate reason for sometimes choosing not to issue a loan to an individual over the age of 40. To cut to the chase of things – it comes down to retirement.

Banks look at the bigger picture

If you’re going for a loan when you’re 40, and the average home loan can take up to 30 years to repay, then you’re looking at a final mortgage repayment at the ripe old age of 70. While this may be fine for hard worker who plans to apply his or her trade until they day they’re physically unable to, it does raise the question of retirement. It is the bank’s responsibility to evaluate your ability to repay the entire loan, and if you have the option to retire before it’s paid back, then this is something a risk assessment specialist will have to consider.

Not only that, but if you’ve not owned a house up until that point, this is something else the banks will look into. Why haven’t you owned a house until now? What was holding you back? Why now? What changed your mind? This is so they can determine whether you are responsible with your finances and reliable when it comes to paying bills on time.

It pays to be honest

At the end of the day, your best chance to secure a loan is to simply be upfront about your reasoning. Perhaps you’ve been overseas travelling for 10 years or more. Perhaps you had a divorce or have had no money. Whatever your reason, it’s important to show any instances where you’ve been financially reliable. This could be a flawless record of paying your rent on time and other bills, or it could have been another smaller loan you had to purchase your car which you paid off early.

So while it’s not impossible to get a home loan after 40, it’s certainly more feasible to look at getting this process started as soon as possible.