Is It Too Late to Buy a House at 40?

Turning 40 can feel like a big milestone. You might be thinking more about retirement or feel like you should have reached certain life goals by now because of societal pressures. Many people want to own their own home, but is it too late if you’re 40 and haven’t bought one yet? The short answer is no, it’s not too late. It can be a good idea to buy your first home when you are 40 years old.

You Have More Financial Stability

In your 40s, you’re more likely to be in a better place financially than you were in your 20s or 30s Here are some factors that contribute to greater financial stability at this stage of life

• Higher income. Your income will likely have increased as your career progressed. With more disposable income, you can save more for a down payment.

• Less debt. Many people carry debt like student loans or credit cards in early adulthood. By 40, you may have paid off much of this debt.

• Better credit score. Years of responsible bill payments and credit usage will have improved your credit score, making it easier to qualify for a mortgage.

• More savings. You’ve just had more time to save money if your goal was to buy a house.

You Can Afford a Larger Down Payment

The 20% down payment “rule” for avoiding private mortgage insurance isn’t necessarily a hard-and-fast requirement, but putting down more upfront generally results in better mortgage rates.

By 40, it’s realistic to have saved more to put down on a house. Some options like the Lifetime ISA in the UK even provide a 25% bonus on contributions up to age 40, turbocharging your down payment savings.

With substantial funds already saved, you can shop for homes well within your budget rather than stretching to buy with a tiny down payment.

Your Priorities Are Clear

When you were a young adult and first moved out, buying a house might not have been on your list of things to do. You probably have a much better idea of what you need and want in a home now that you’ve lived in rentals for over ten years.

You’ll know exactly what features are must-haves versus nice-to-haves. Your list probably includes things like:

• Size and number of bedrooms
• Neighborhood amenities
• Commuting distance to work
• Space for hobbies
• Yard size

You’ve learned what you really want because you took the time to rent. You don’t have to settle for your first home when you shop.

You Know What You Want in a Community

Along the same lines, renting for many years has exposed you to different neighborhoods and communities. You’re able to make an informed decision on what type of area you want to buy in.

If schools are a consideration because you plan to have kids, you can limit searches to areas with highly rated school districts. Urban dwellers can look for homes in neighborhoods with easy transit access if that’s still important.

The point is—you know what factors make somewhere feel like home to you. Your house hunt can zero in on communities meeting your lifestyle needs.

You Can Better Predict Your Future Needs

At 40, it’s easier to forecast what your life might look like in another 10 or 20 years. You can better judge if you may need or want a larger home later on.

Maybe you can see yourself starting a family soon. Or you realize you’ll likely need to care for aging parents in the near future. With major life events in view, you can buy a home that fits not just your current situation, but your foreseeable future needs too.

You’ll Use the Home Longer

Buying your first house at 40 still gives you plenty of time to enjoy it and benefit from homeownership. If you purchased a house at 30 instead, you may have already outgrown it after a decade if your household grew.

By buying at 40, you’re more likely to get 15+ good years in your home before needing to upsize for retirement or downsize as empty nesters. That stability lets you build more home equity and establish deeper roots in the community.

You Can Better Manage Costs

While buying a house is a major expense at any age, your financial situation in your 40s makes it more manageable.

Your higher income and savings make budgeting for new homeowner costs like property taxes, insurance, and maintenance less overwhelming. You’ll also be better positioned to tackle unexpected repairs or costs that crop up.

And since you may plan to stay in this home longer, you can spread out major update projects over many years. The costs of homeownership are easier to absorb when buying at 40 vs. 30 or younger.

Mortgages May Be More Affordable

Interest rates always fluctuate according to market conditions, but mortgage rates have dropped significantly in the past decades. Rates have been below 5% for over 10 years now, dipping to unprecedented lows during the pandemic.

Locking in a low mortgage rate makes buying more affordable. A lower rate means lower monthly payments or paying your loan off faster. Either is a plus when buying your first home at 40.

You Can Still Upgrade Later

Finally, buying at 40 doesn’t necessarily mean this will be your “forever home.” While it’s wise to buy a home well-suited for your needs now and in the near future, you can still sell and upgrade down the road.

After developing more equity and buying power in this first home, trading up is definitely possible later in life if you desire. Homeownership at 40 just gets you on the property ladder sooner.

The Takeaway

Turning 40 without having purchased a home yet may seem concerning if homeownership is important to you. But in many ways, buying your first house at 40 can be easier than doing so at a younger age.

With financial stability, clear priorities, and an understanding of your needs, you’re in a great spot to become a homeowner. Take advantage of your situation by starting the home shopping process. The timing to buy your first home at 40 couldn’t be better!