When you have decided to contact a mortgage lender or broker about obtaining a home loan, one of the first questions that will always be asked is you age. For a lot of individuals, this is a piece of personal information that they are not very comfortable to reveal at the very beginning. Especially if they are just making a general inquiry.
However, age is a big factor that can determine how a home loan package can be structured for you. Very often, individual borrowers miss out on how important informing their age during qualification is to getting a credible assessment.
Mortgage lenders usually set a cap on the age that a mortgage can stretch out. This means that if the age cap is set at 65, your maximum term of the home loan will be 12 years if your current age is 53. This sets a huge implication on the housing loan that may be offered to you.
Because your monthly repayments get lower when the term is longer, a shorter term will mean that you will be subject to a higher payment each month. The higher monthly financial commitment will in turn affect your debt servicing ratio that shows your personal gearing and leverage. Debt servicing ratios pit your debt against your income to formulate a ratio. A high debt servicing ratio can mean a bigger risk to the lender.
So next time when you make a general inquiry on the best home loans around, do not just ask for the deals with the best rates as you may not be able to qualify for them because of your age. You may also not be able to obtain your desired loan quantum.
Some circumstances demand that you find the mortgage lender that is most flexible on their internal age caps so that you can obtain a home loan close to what you desire.
