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It can be harder for seniors to get mortgages, research shows

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A senior couple stands side-by-side in front of a home.

Older homeowners may be denied refinancings or new mortgages because of high debt-to-income ratios or other financial factors, according to Linna Zhu at the Urban Institute. Westersoe/Getty Images

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The road to homeownership is not always easy. Here’s another challenge: Once you reach a certain age, it can be harder to secure a mortgage. Especially when you hit 70.

That’s according to new research from the Center for Retirement Research at Boston College.

Yet it’s pretty common for older people to think about moving. “That may mean they’re moving into a retirement community, or a warmer climate, or they’re going from a two-level house to a one-level house,” said David Dworkin of the nonprofit National Housing Conference.

He said it’s also common for older homeowners to try to refinance their home to get a better interest rate.

“The question remains, can they afford the payment every month?” Dworkin said. “That’s what a lender is going to be looking at.”

He said as people get older they generally have less income, mostly because they’ve stopped working. Linna Zhu at the Urban Institute said that’s one of the main reasons seniors are more likely to be denied if they try to refinance or get a new mortgage.

“The top denial reasons for older homeowners are high debt-to-income ratios, lack of collateral or insufficient home equity, as well as deteriorating credit scores,” Zhu said.

For mortgage lenders, there is also the question of whether it makes sense to give someone in their 70s or 80s a loan that’s designed to be paid off over many years.

Teresa Ghilarducci of the New School for Social Research put it bluntly: “Older people have a shorter time to live and may have less resources to pay a mortgage off.” She said most people don’t realize that it can be harder to get a mortgage at an older age. Ghilarducci herself only learned it while doing research for a book.

“If I, a Ph.D. in economics and a retirement expert, didn’t know it until I actually looked, I’m pretty sure nobody else knows it,” she said, adding that it’s important information for people in their 50s and 60s to have to help them plan for retirement.

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