Mortgage Lenders are now being accused of discrimination as mortgage application is rejected because 48 year old’s husband is too old

Victoria Wallace and her husband of 17 years, Sean, have unfortunately been denied the ability to jointly own their marital home after they had a mortgage application rejected on the basis that Sean was deemed “too old”.

The application for twice Victoria’s income was made to Yorkshire Building Society and only included Victoria’s finances, as her six-figure wage was more than adequate by any measure of affordability and Sean, in contrast, earned very little.

However, to the couple’s surprise, their application was rejected. They had applied for a mortgage over a 20 year term which meant Sean would be over the age of 75 whilst the mortgage remained in force. It is for this reason that the lenders refused the application, despite the remarkable fact that Sean would not be contributing any of his income.

This meant a forced change in tactics for the Wallaces, who had to decide whether to opt for a mortgage over a shorter, 14 year term – meaning Sean would be 74 come the end of the mortgage – or apply for a mortgage in Victoria’s sole name.

Sean and Victoria, who wanted to free up more of their income now and planned to pay of the mortgage before the end of the term in any case, decided on the longer 20 year mortgage put solely in Victoria’s name and were consequently accepted by Santander.

Victoria sums up her anger:

“It’s crazy. I would understand the lender’s position if our application was relying upon him for an income. But it’s not. This is clear age discrimination, as it is not based on any financial information or affordability.”

David Hollingworth of broker London & Country recently admitted that increased regulation has “driven tougher criteria for older borrowers” which results in “outcomes that don’t seem grounded in common sense”.

The case of the Wallaces is not the only one of its kind, with brokers recalling several similar scenarios. A husband and wife aged 52 and 46 respectively, had applied for a loan totalling half of the property’s value, only to be denied because the husband would be 67 at the end of the loan and not paying into a pension.

The eligibility squeeze we have previously written about in the younger generations seems to have spilled over into even the most prosperous cohorts of society. But will such a contraction of funding deflate the property market? Or will it continue to surge forward regardless?

www.propertysurveying.co.uk

BT                                                                                                                                         29/07/14

Leave a Reply

Your email address will not be published. Required fields are marked *