Lender Guidelines Prevent Discrimination Against Borrowers

Q: I just retired. Can I still apply for and get a mortgage in the New York area? Thank you. I just love your web site.

A: Yes. As long as you have enough income to qualify, you should be able to get a mortgage no matter what age you are. Lenders are not allowed to practice age discrimination.

In fact, under the Equal Credit Opportunity Act, lenders cannot discriminate based on your race, color, religion, national origin, sex, marital status, age or because you receive public assistance, or charge you a different interest rate or loan terms based on these factors.

A lender may not ask if you’re widowed or divorced and may only use the terms married, unmarried, or separated. If you’re located in a community property state, including Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin, a lender or credit may ask you to provide information about your marital status.

A lender, however, may consider your immigration status and whether you have the right to stay in the country long enough to repay the debt.

And, while a lender may not ask you about your plans for having or raising children (probably not in the cards for you, given that you’re retired), but they can ask about expenses relating to your dependents. And, if you get alimony, child support, or separate maintenance payments, unless you’re relying on them to make your mortgage payments, you don’t have to disclose those either.

For more details on the Equal Credit Opportunity Act, visit FTC.gov.

The bigger issue is fitting within the lender’s mold of a borrower to which the lender is willing to extend credit. Whether you are young or old, the lender will have guidelines to determine whether you have the financial ability to repay the loan. These days lenders must see a stream of income for the prospective borrower to make sure they can repay the loan.

If you are retired, either your monthly social security check must be enough to cover debt you’re taking on, or you must have other monthly income to add to social security. If you have this stream of income and the amount of income you receive is sufficient to make monthly payments on the loan, including real estate taxes, homeowner’s insurance payments and community association fees, along with all of your other living expenses, you should be able to obtain a loan.


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