Whether you're young, middle age or retired, getting a mortgage isn't always easy. Homebuyers at different stages of life typically deal with their own unique issues when it comes to loan approval. "Different age groups face different sets of challenges," says Edward Achtner, regional sales executive for Bank of America in Oakland, Calif. "You have to take the time to determine the right mortgage product for your situation." Here's some advice from several loan experts on how homebuyers of different ages can overcome common stumbling blocks.
Many first-time homebuyers often have high amounts of student-loan debt, and small cash reserves for a down payment which prevents them from being able to take out a mortgage, says Gloria Shulman, founder of Centek Capital Group in Beverly Hills, Calif. "I have had to come up with very creative financing solutions for surgeons who are saving lives but getting denied (home) loans because of their student loans," she says. Shulman says mortgage providers have some pretty straightforward rules regarding your "debt-to-income" ratio, so make sure your income allows you to comfortably repay the student loan alongside your mortgage, she says. If you're looking to purchase a "starter house" that you'll only reside in for a few years, consider looking into a 5 or 7-year adjustable-rate mortgage (ARM). "They'll likely have lower mortgage rates (which could mean easier approval)," Shulman says. Lastly, many states offer homebuyer assistance programs for first-time buyers that assist with either a lower down payment, interest rate or sometimes both. Be sure to research which programs are available from the Housing Finance Agency in your state.
Homebuyers in their 30s, 40s and 50s are part of the "sandwich generation" where they may need to upgrade to a larger home to accommodate a growing family, whether that means more children, aging parents or both, says Achtner. "These borrowers are often in their prime earning years, but they also have more complexity with their family," he says.