How old is too old to buy a house?
April 2, 2015 12:27 PM   Subscribe

For various reasons, I'm in my late 40s and my husband and I still rent. I'd like to buy a house (well, an apartment, actually) eventually, but am wondering if it's too late to do that now and I should just resign myself to renting.

I'm 48 and my husband is 44. For reasons really beyond the scope of this question, I haven't wanted to buy a place (and it's not altogether clear that I was in a position to anyway, until fairly recently), so we've been renting since we were married 10 years ago.

The reason this comes up now is that we were recently obliged to leave our apartment because it was in a private house and the landlady wanted the apartment for her son and his new baby. We weren't thrilled, obviously, but we understood. The timing was very poor, however, because we had been planning to start looking to buy this year; now, with our moving costs for our new apartment, that won't be possible. To make matters a little more complicated, we had to sign a two-year lease on the new place, because the landlord insisted.

So, assuming that it will be too much hassle to get out of our new lease (which it probably will be -- the place isn't rent stabilized), we'd be looking at buying an apartment in early 2017, when I'll be 50. (I'm the primary breadwinner, so it's pretty much on me). I don't even have any clue whether a bank would give me a mortgage at that age, or whether I'd want one.

Other probably pertinent info: I have a very stable government job, a decent salary (even by NYC standards), and what I guess you'd call very good credit.

So, advice and comments welcome! Thanks everyone!
posted by holborne to Work & Money (15 answers total) 11 users marked this as a favorite
You are not too old. Be sure to qualify for a 15 year mortgage. This will ensure that when you are ready to retire your mortgage will also retire.

When I worked as a mortgage officer the retirement income qualification did not come into play until the borrower was 55. This was some years ago.
posted by Midnight Skulker at 12:36 PM on April 2, 2015 [5 favorites]

I can't imagine there would ever be a reason that age would come into play when buying a house.

That being said, this raised an eyebrow:

"...with our moving costs for our new apartment..."

If moving costs and deposits, etc, wipe you out, then you aren't ready to buy a house in the first place. 10-20% down is still the way to go if you want to keep a reasonably low mortgage and have money left over for home ownership expenses that you aren't used to having if you have always rented.
posted by TinWhistle at 12:39 PM on April 2, 2015 [15 favorites]

This is the best rent vs. buy calculator that I've found on the Internet:

You do have to enter a fair bit of data but you should get a sense of whether or not it'll be worth it with just the big three questions:
1) How long do you expect to live there?
2) How much would you spend on a home?
3) What are the terms of the loan you would get?

That's just the financial part of the decision. Of course there are other non-financial issues that can swing it one way or another, but those are addressed at the bottom. Your age probably isn't as much of a deterrent as you might think because of the way the curve levels off after a few years (like 15 years is not that different than 30).
posted by thewumpusisdead at 12:40 PM on April 2, 2015 [16 favorites]

You should have no difficulty based solely on age getting a mortgage. Mortgages remain attached to the property as a lien that must be paid in the event of the death of the borrower, so the age of the borrower is not typically (and in the US likely could not be legally) a consideration in the decision to extend a mortgage or in writing its terms, beyond the retirement income question.

Talk to several financial institutions about what sorts of mortgages are available and what you might qualify for, get an accurate estimate of what your monthly mortgage (principal and interest) payment will be on the various options. [Mortgage options generally are length of the mortgage (how many years you have to pay it back); interest rates; whether or not the interest rate will change over time; and whether there is a penalty for paying the mortgage off early; whether the mortgage company will collect, escrow and pay annual property tax. Size of your downpayment affect these terms significantly] Find out what the monthly homeowner's association fees are in buildings where you're likely to buy; find out what homeowner's insurance will cost (if you don't purchase a homeowner's policy, your mortgage company will force-place insurance and it's always more expensive); find out what a typical tax bill for a place like you'd want in the neighborhood you'd want would be. Add those numbers (mortgage payment, monthly HOA, monthly homeowner's insurance, monthly portion of the annual tax bill, utility bill) and then see if that's a better deal for you than renting.

(incidentally, this is one of the purposes of life insurance, to provide the surviving spouse the means to pay off a mortgage in the event of the death of the primary breadwinner, preventing foreclosure and loss of the family home).
posted by crush-onastick at 12:42 PM on April 2, 2015 [3 favorites]

Your age is not a factor at all. My husband (age 60) and I (age 64) are in the process of buying a co-op apartment in New York City (after renting for the past ten years, like you), and we had no problem getting a mortgage.
posted by merejane at 1:12 PM on April 2, 2015 [3 favorites]

I would think that you might prefer to have your own home as you get older, as less likely to have a landlord try to kick you out when you are 85.
posted by Toddles at 1:48 PM on April 2, 2015 [3 favorites]

An NYC-specific piece of info, in co-ops, your monthly maintenance payment will cover taxes, water, the building's mortgage (if it has one), insurance for the building, shared building resources (the super's salary, etc), common space heating/cooling/electricity, plus other assorted building expenses. You should be prepared for your maintenance to increase between 2-5% annually (mine's been going up 3.5% per year pretty consistently), to cover property tax increases, COLA increases for building staff, etc. A building with incredibly low/never increasing maintenance may be a wonderful find, or it may be a disaster waiting to happen if the building hasn't been keeping up with roof repairs/plumbing issues, etc. Co-ops also sometimes charge "special assessments" to cover emergency costs if they don't have a big enough reserve fund, so, keep an eye on that and if you choose a building without a reserve fund, you may need to fork over $5-10k or more at once if the building needs a major repair (most buildings allow payment plans for special assessment payments though).

You should get your own insurance, but co-op owners insurance is just souped up renters insurance (it covers your stuff + liability and the build-out of your apartment, but not the building structure itself). The building's insurance is what keeps you out of force-placed insurance, so make sure the board is responsible and keeps the building adequately insured!

But, I wouldn't worry about buying at 50 as long as you have a life insurance policy to cover the mortgage in case the worst happens and have a plan to either pay off the mortgage before you retire or ensure that the mortgage + maintenance will be affordable on your retirement income.
posted by snaw at 1:56 PM on April 2, 2015 [2 favorites]

I bought my first home at 54. I didn't really want to buy, I was happy renting, but as I got older my standards of what I was willing to rent rose (no more funky studios where I had to fix everything myself and did so because the rent was such a steal...) to the point where in the current economy, my monthly mortgage payments on a three bedroom two bath house were going to be $500 to $1,000 less than my rent on a two bedroom higher-end apartment (I'm in the SF Bay Area).

Factors: I had the 20% down payment so got the very best interest rate. I also took out a 30 year loan because I intend to sell the house in the next 5-10 years and don't care about paying it off before retirement.

I have a home warranty (through American Home Shield) and a gardener. If anything breaks or needs attention inside, I call the warranty company and someone is out to fix it for a flat (low) fee in 1-2 days. If anything breaks or needs attention outside, my wonderful gardener takes care of it. It is actually a better experience for me than any of my rentals (except one really nice "corporate" apartment building I was in for about a year).

So go for it! I'm finding the whole experience much more enjoyable than I expected.
posted by agatha_magatha at 2:01 PM on April 2, 2015 [3 favorites]

I bought a house with my partner in my late 40s, about 6 years ago. I think buying over renting makes sense financially (in terms of making equity as another form of saving for the future, and getting income tax deductions on mortgage interest), particularly if, like us, you have two good incomes and can pay the mortgage off more quickly than the typical 20 or 30-year term (to avoid still having mortgage payments into your retirement years). And as others have said, if you both have good credit, I can't imagine you'll have trouble getting a loan.

The main drawback I find is the stream of maintenance and chores that owning your own property requires -- I don't have the energy a young new home-owner probably has, and I am sometimes discouraged by all the little things I don't get to, or which tire me out a bit taking care of. But at least with an apartment you won't have the landscaping / mowing aspect of home ownership to deal with.
posted by aught at 2:03 PM on April 2, 2015

In some states you can get out of your lease without penalty if you have executed a contract to buy a house. Check your laws.
posted by toodleydoodley at 4:46 PM on April 2, 2015 [2 favorites]

There is so much good advice above, all I really want to say is that, yes, don't let age stop you. I bought my first house when I was mid-40s, my husband was 55 (his third house). I was dead-set against buying, having been a renter and largely really liked the convenience. But after 7 years of owning, it would be hard to go back to renting for the following reasons: no one can raise my rent, no one can evict me for any reason, I can have pets without worry, I am not going to be priced out of a neighborhood I have grown to love, and NO ONE ELSE HAS THE KEYS TO MY HOME and can give 24-hour notice and then just enter. That last one drove me crazy. And just to be fair, there are plenty of cons to renting a home, and no doubt when I am aged and decrepit I am going to look at doing that again. But for now, so worth it.
posted by nanook at 4:59 PM on April 2, 2015 [2 favorites]

I'm 49 and my husband is 50 and we close on our first home in 2 weeks. We got a 30-year mortgage but plan to make aggressive extra payments to pay it off early. We had no problem getting the mortgage.
posted by matildaben at 9:29 PM on April 2, 2015

Thanks so much for all the answers, everyone. I'm always blown away by the collective knowledge here.

To answer one question above: the moving deposits and other expenses didn't wipe us out at all -- far from it. But it has been quite a tab. Since most co-ops insist upon seeing X amount of liquidity (or so I understand), I'd like to build up our cash reserves before we start looking to buy.
posted by holborne at 11:38 PM on April 2, 2015

Age is completely irrelevant. A good investment is a good investment at any age.

Do not in anyway feel like you need to get a short term mortgage because you are older. The banks might try to sell you on a short term mortgage, but try to get the longest term possible (which is usually 30yrs, but if you can get 50yrs that is better). Longer term means lower monthly payment. You can always pay more. If you can afford $1000 per month, and you can get a 50yr mortgage requiring on $250 per month - then still pay $1000 per month, and the extra $750 will go directly to the under lying balance on the back end, rather than paying interest. And, if times get tough, the monthly mandatory payment is low. Always best to get the longest term possible.
posted by Flood at 3:56 AM on April 3, 2015 [1 favorite]

Everything I wanted to say has already been said by others, but I'll add two very tiny bits:

I'm 34 and my partner is 54, and we just bought our first house together last year. We're in San Francisco. Our mortgage is a couple hundred dollars less than our average rent has been over the last decade. Had I known that this was even a possibility, I would have tried to buy a place much sooner.

I honestly wake up every day thinking, oh my god, I don't have a weird landlord to deal with anymore. Liberating!
posted by late afternoon dreaming hotel at 10:08 AM on April 3, 2015 [2 favorites]

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