Older borrowers face tough times

Older borrowers face tough times
Anybody over 35 years of age could be rejected and effectively barred from getting a new mortgage, even if they are just refinancing an existing mortgage, under responsible lending guidelines in the new National Consumer Credit laws. And anybody in their forties and above who applies for any kind of credit can expect to be asked to demonstrate significant other assets or superannuation savings. According to real estate agents, many mortgage refinancers over 35 years of age are in danger of being rejected by banks unless they can show their mortgage will be fully repaid before or upon retirement from their superannuation or other investments. Families who are selling one house and moving to another, could potentially be left without a home or the ability to get a new mortgage, unless they organise their new loan and all their financial plans up to and including their retirement, before they sell their existing home. However, the average Australian superannuation balance for Australian men is less than $90,000 and just $53,000 for women. The average Australian aged between 55 and 64 years of age has about $142,000 in super, according to the Australian Bureau of Statistics data compiled by the Australian Super Funds Association. But any mortgage applicant over 35 years of age with little superannuation and no other investments must be rejected by banks, brokers and all other lenders for a thirty year residential mortgage, said Geoff Baldwin, CEO of WA based real estate group ReMAX. “The NCCP is effectively discriminating against some borrowers on the basis of age,” said Baldwin. Lisa Montgomery is chief executive of RESI Home Loans and says the new laws are doing their job and protecting people from being left with big mortgages and no income except a Centrelink pension in their old age.
Brisbane Sunday Mail

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