Older Borrower Mortgages

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Older Borrower Mortgages

Paul Holland talks all about mortgages for older borrowers.

How do I better my chance of securing a mortgage as an older borrower?

Generally speaking, people in clerical roles will fare slightly better when it comes to borrowing into their later years because they can have a more sustainable career than someone in a more labour intensive career, such as a bricklayer.

Hopefully people in this age group have prepared by paying into a pension of some sort, as that’s always going to be really helpful for borrowing when you’re approaching retirement age or beyond.

Keeping your credit clean and things like that are just going to help not to limit the lenders available to you and help the application process.

Can you get a mortgage after you retire?

Yes, you can. The affordability once you retire obviously won’t be based on your income. It will only be based on other incomes that you’re in receipt of, such as pension income or income from investments, if applicable, that could be utilised.

As well as income differences, there are maximum ages on some mortgage products, so you might not necessarily be able to borrow money over as long a period of time as you would if you were younger.

What is the age limit for getting a mortgage?

Every lender is completely different. There are lenders that have no age limit to maximum lending, but most have age limits that will differ from one lender to the next.

There are also sometimes terms whereby the maximum age at the end of the term can differ if you’ve got a pension. It can also depend on whether or not you’re looking at a residential mortgage or a Buy to Let mortgage because they’re looked at slightly differently.

Can I get a thirty year mortgage at age fifty-five?

Some lenders allow mortgages to extend to age eighty-five or beyond and some will have a maximum age on entry of fifty-five.

Can I get a mortgage at sixty?

Yes, you can get a Lifetime Mortgage at sixty, which is a completely different product to a conventional mortgage. Advice would need to be through a broker with specific qualifications which at the moment we don’t hold.

Why can it be harder to get a mortgage when you are older?

The main thing that people struggle with is affordability. The issue with affordability is that the term is usually shorter because you’re older. There are therefore higher repayments if you take a loan over a shorter period of time.

Lenders will look to reduce the amount you can borrow to make sure you can still afford it on a monthly basis and sometimes they’re using projected pension income, rather than your actual income. If it’s less than what you’re earning or earned during employment, you’re going to struggle to meet those affordability criteria.

Should you use Equity Release?

Equity Release is very similar to Lifetime Mortgages. It’s not something that we’re qualified to give advice on, but both myself and my colleague, Simon, are embarking upon those qualifications. You will need a qualified Equity Release advisor to help you decide whether it is suitable for you or not.

Which lenders lend to older borrowers?

All of the lenders available will lend to older people. Lenders like Barclays or HSBC are willing to lend up to age eighty in some instances. Even beyond that, there are lenders, but they’re not necessarily going to be high street names. Some of them wouldn’t even have a maximum age at all, assuming there is an income source available.

What types of mortgages can you get as an older borrower?

Generally speaking there are no differences. Product’s are going to be the same, as lenders don’t normally implement a different range for a different age bracket.

Because of the limited availability of lenders, it’s worth having a chat with a broker. Knowing how each personal circumstance will impact you as a borrower could be helpful for a borrower a little bit later on in their life.

Your home may be repossessed if you do not keep up with your mortgage repayments.