Many elderly homeowners fear they will be discriminated against because of their age. Many rationalise that because they are 80 or 90 years old, they may not be able to obtain a new mortgage for 30 years. Lenders use to be able to require elderly homeowners to include certain modifications to their homes, which adapt the home for use by an elderly homeowner. As of 2011, lenders may not request any additions that are modifications of a home due to the borrower's age.
A mortgage is a contract and only someone who is legally recognised as an adult may sign the mortgage contracts. Usually this means the borrower must be at least 18 years of age at closing. This doesn't mean a mortgage company automatically gives every 18-year-old a mortgage, because they must qualify for the mortgage like anyone else. An 18-year old may or may not have the sufficient income or employment history to qualify for a mortgage loan. Many loan programs require a two-year history of employment before approving a mortgage. Additionally, an 18-year old may not have the sufficient credit history for loan approval.
There is no maximum age to receive a mortgage. Even the oldest person in the world can qualify for and obtain a mortgage in the United States. Often, senior borrowers obtain their income from sources other than employment. Sources such as retirement, pensions and Social Security are commonly used to qualify for mortgage loans. Lenders cannot and do not require the borrowers receive income from employment or self-employment only.
The federal government forbids lenders from discriminating against the borrower solely based on their age. The Equal Credit Opportunity Act forbids lenders from discriminating against borrowers for a number of different reasons. These reasons include race, colour, age, sex and marital status among others. Additionally, lenders may not increase the cost of the interest rate or the fees charged on the loan because of these reasons. Wrongfully discriminated borrowers should contact the Federal Trade Commission at (877) 382-4357 to file a complaint.
The Federal Housing Administration offers reverse mortgage loans only two borrowers who are ages 62 and greater. Everyone listed on the title as an owner of the house must be at least 62 years old. These loan programs are specifically designed to help seniors supplement their income and lower their monthly costs. These loan programs do not require any monthly payments for the life of the loan, which lasts for the life of the borrower. Additionally, the borrower may receive monthly payments from the mortgage company for the life of the loan. These loans are FHA-insured and the borrowers retain ownership of their homes throughout the entire loan.