28 Feb Mortgages In Retirement
This has changed enormously and is a major lending growth area.
Can I get a mortgage once I’ve retired?
Possibly, yes. Although it’s true that mortgages in later life are more difficult to obtain, the problem tends not to be affordability. The problem is that many lenders still have an upper age limit (usually somewhere between 65 and 75) for the point at which their loans must be repaid.
How can I get a mortgage in later life?
The first thing you’ll be asked to do is to prove your income. Mortgage providers like to see regular income from investments, pensions or insurance policies. Next, work out exactly what it is you need, like a fixed rate or variable rate loan.
The next thing to do is to contact a mortgage broker in London or professional financial adviser. This will save you time, as they’ll have access to lenders who are more open to older borrowers. Remember: if at first you don’t succeed, consider trying another adviser – mortgages for older people are something of a specialist area.
There is a chance that you may find it harder to get a loan, as you pose a higher risk to lenders. There may be longevity issues surrounding your age, but that doesn’t mean you won’t eventually find a deal. Mortgages for the older borrower do exist, but they are subject to stringent affordability checks, and you will probably need a larger deposit than other borrowers.
How long can this mortgage run?
Lenders will now lend to your 85th and 90th birthday and beyond. Some lenders now have no maximum age at all.
Are we talking Equity Release?
Equity release has its place – but we are actually talking about mainstream residential lending here – on an interest only basis – with no capital roll up. Yes – you read that right.
What about equity release then?
To be considered – especially if your income doesn’t justify the loan you are looking for.
If you’re already a homeowner and looking to release a lump sum from your home, you could consider equity release. One form of equity release is a ‘lifetime mortgage’, where you can release funds from the value of your home whilst continuing to live there for the rest of your life (or until you move into long-term care). Ultimately, taking out any type of mortgage is a huge commitment, so just be sure it’s what you really want at this time of your life.
Other things to consider
We’d recommend talking to your close family before taking out a mortgage – whether it’s a re-mortgage or a new product. Children, in particular, may have strong views about such a serious commitment to long term debts – and there may be other ways to raise money in the shorter term.
How can we help?
As part of our service, we take the time to understand our clients’ unique needs and circumstances so that we can provide them with the most suitable solutions in the most cost-effective way. If you would like to discuss the range of services we offer, please contact us for further information.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
EQUITY RELEASE WILL REDUCE THE VALUE OF YOUR ESTATE AND CAN AFFECT YOUR ELIGIBILITY FOR MEANS TESTED BENEFIT