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Getting a Mortgage in Your 40s: What To Know

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By the time many of us reach our 40s, we get the impression that we should be feeling and acting… well, older. Even though many of us have kids, we still feel much the same way as we did in our 20s. And our lives tend to be a little less financially ordered than perhaps our parents were at the same age. But fear not! That doesn’t mean that we're financially irresponsible. It’s simply that times have changed. When our parents were younger, mortgages were easier to come by and property prices were infinitely more affordable.

There was a time when even those with a modest income were able to own their own homes. But times have changed, and soaring property values combined with lenders being a lot more cautious after the financial crash of 2007-2008, many GenXers and older millennials have rented their entire lives. And this has had a knock-on effect on all of their finances. Since rent repayments are typically higher than mortgage repayments, many people in their 40s find it difficult to budget and save.

Still, having built up your credit score and established yourself in your career, you may yearn for a place of your own. Somewhere you’ll be able to decorate however you want without worrying about incurring the wrath of a landlord. You may assume that because you’re in your 40s that the chance to buy your dream home has passed you by. But, as we’ll see, you can still get a mortgage and own the home you always dreamed of in your 40s…

Find a mortgage broker you trust
There are so many mortgage products on the market today that it’s difficult to know where to begin. You could spend the better part of your days perusing different products and still be none the wiser as to which best fits your circumstances.

That’s why it’s so advantageous to reach out to a mortgage broker like Altrua Financial. A mortgage broker takes the time to get to know your circumstances, needs and goals and helps you to choose the right product accordingly. They more than pay for themselves in terms of mitigating risk, and helping you choose an option that prevents you from unnecessarily wasting money on interest or paying off your mortgage well into retirement.

Choose an open mortgage to help pay your mortgage off faster
When buying a home in your 40s, your priorities will be slightly different than someone in their 20s. You’ll want to focus more on paying your mortgage off faster while someone 20 years your junior might want to focus on smaller monthly repayments.

As such, it’s best to choose an open mortgage. This will allow you to make a lump sum repayment or even pay your mortgage in full without penalty if you should get a windfall such as a big bonus at work or an inheritance from a departed family member.

On a variable rate? Up your monthly payments when rates drop
For the same reason, you may also want to opt for a variable rate mortgage. If interest rates drop, so too will your monthly payments. However, you will likely have the option to increase your monthly mortgage repayments and thus get more equity in your home so that you can pay it off faster. While it may be tempting to simply accept the lower monthly repayments and the added cash flow that they bring to your household budget, your mortgage should be your main priority.

Plan your budget around your mortgage
A carefully balanced household budget is the key to harmonious finances. However, depending on your goals, your budget will have different emphases at different times of your life. When you’re younger, for instance, you’ll want to focus more on paying into your savings so that you need to rely less on credit. However, if you’re getting a mortgage in your 40s, you’ll want to focus your budget on paying off as much of it as possible, which is why it may be best to try and settle other debts like credit cards to facilitate cash flow before applying for a mortgage. Consolidating your non-mortgage debts may help you pay them off faster while also easing cash flow.

Accept that you may need to retire later
Finally, depending on your circumstances, you may find that you have to retire later in life to ensure that you can still live comfortably without having to worry about paying off your mortgage. However, if you keep yourself in good financial and physical health, there’s no reason whatsoever why you can’t still enjoy a long and prosperous retirement.

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