Tuesday, April 11, 2023

A Great Credit Score, but She Can’t Get a Mortgage

Estate planningDespite solid financial track records, older Americans are finding it harder to get a mortgage due to their risk of mortality and lower retirement income.

Older adults have higher credit ratings than any other age cohort; however, studies show they are substantially more likely to be rejected for most mortgages. Many in this generation find their wealth tied up in real estate. However, a house is not a financial asset. It only turns into an economic asset once it is sold.

The Equal Credit Opportunity Act has long prohibited age discrimination and other factors; however, lenders are permitted to inquire about an applicant’s age. Mortality risks are a permissible factor to consider. “Someone dying is really inconvenient to a lender.”

Another major factor is reduced income after retirement. It’s significantly harder to get a mortgage after you retire.

For more information see Paula Span “A Great Credit Score, but She Can’t Get a Mortgage” The New York Times, April 8, 2023.

Special thanks to Lewis Saret (Attorney, Washington, D.C.) for bringing this article to my attention. 


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