Are some of us getting too old for a mortgage?

Once upon a time, most twenty-somethings could look forward to a comfortable middle age, confident that theyíd have a job and a nice home ñ and would be well on the way to paying off the mortgage. But thereís little chance of such a fairytale ending for todayís young people, who are struggling even to get on the first rung of the property ladder, let alone live happily ever after.

However, their hopes were struck a blow recently with news that would-be borrowers in their 40s could face having their mortgage applications rejected ñ because lenders fear they wonít be able to complete a traditional 25-year loan.

Currently, few lenders will allow borrowers to continue a mortgage past the age of 70 and just one lets loans run until the borrower is 85. At the moment, this mainly affects 40-somethings wanting to move up the housing ladder but it could soon become a major issue for first-time buyers, who are increasingly being forced to put home ownership on the back burner.

A study by MoneySupermarket shows that first-timers now expect to wait until they are 43 to get on the property ladder in London, or 38 if they live elsewhere. And the average age of new buyers is rising ñ in the 1960s, it was just 27, according to Post Office Mortgages.

Add to this that young people now need to earn 55 per cent more to match the lifestyle taken for granted by their parents at their age, and itís no surprise that more than half ñ 53 per cent ñ of would-be first-time buyers have given up hope of being able to afford their own home.

ìThereís no denying that prospects can look pretty bleak for young people struggling to save for their first home,î says Pete Turner, managing director of Experian Interactive.

ìBut thereís no need to give up hope altogether. In fact, the sooner you take action to improve your finances, the better chance you have of beating the system and getting the keys to your first home.î

You could start with these five tips:

Learn to save

According to the Halifax, 95 per cent of 20 to 45-year-olds claim not have enough spare cash to put anything by ñ but itís largely a question of mind over matter. Start by auditing your spending to find out where your money is going ñ and where you might cut back. Use price comparison sites, such as Lower My Bills or MoneyExpert.com, to make your money go further and put a little aside every month ñ some accounts pay higher interest if you contribute regularly.

Clean up your credit report

This is the history of your credit accounts, such as cards and loans, plus your repayment record. Lenders look at it before they make you an offer, so it needs to be accurate and up to date. Contact the relevant lender if you disagree with any item. You can see your Experian credit report for free with a 30-day trial of CreditExpert.

Öand keep polishing

Close unused accounts, paying particular attention to any shared with an ex-partner ñ your credit status could suffer if he or she has money troubles. And start tackling your debts, beginning with the ones charging the highest interest. While youíre at it, register to vote at your current address. This shows lenders that you live where you say you do and may improve your credit rating.

Never skip a repayment

Missed and late payments stay on your credit report for at least three years, warning lenders you could be unreliable, so set up direct debits. If you have a legitimate reason for missing a repayment, add a note of explanation.

Keep an eye on your progress

Checking your credit score regularly will help you to keep on track and give you a good idea of your prospects. Itís free to see your Experian Credit Score with a trial of CreditExpert and you can check it as often as you like.

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