Mortgages for over 50s - what are the options?
If you have plans to buy a home once you’re over the age of 50, you may find it a little more challenging to borrow money on a mortgage. Why is this, and how can you improve your chances of achieving your property goals?
Can I get a Mortgage at any age?
Your age is an important factor in getting a mortgage, as many lenders set upper age limits for mortgage applicants.
The reason is that mortgage loans are long term – often lasting 25 years or more. Lenders often want you to have repaid the mortgage in full by the age of 70 or 75, making age 50 the limit to get a 25 year mortgage.
That said, every lender is different, and some set a maximum age of 85 years.
How can I increase my chances of getting a mortgage if I am over 50?
There are a few options to help you find a mortgage over 50:
- Look at a shorter mortgage term – say 10 or 15 years, to help you stay within the age limits. This will, of course, make your mortgage repayments considerably higher.
- Find a lender with a more flexible approach – many specialist lenders will lend to people of all ages by looking at them on a case-by-case basis.
- Explore a retirement interest-only mortgage – this is a special type of mortgage for older borrowers whose age excludes them from a mainstream mortgage. You will only pay the interest due each month. At the end of the term you need to repay the loan in full.
- Check your credit score – poor credit will harm your chances of approval.
What information will a Mortgage Provider need if I am over 50?
Lenders always need evidence that you have enough income to cover the repayments. Once you retire this is even more important. You will need to supply bank statements plus confirmation of your pension and how much it will pay you per year.
You will usually need to set out your monthly costs and outgoings for the lender too so that they can assess affordability.
Can I port my mortgage to a new home?
Porting your mortgage means moving your existing mortgage to a new home. It usually involves reapplying for your current mortgage deal – which can result in rejection if your financial situation has changed.
Sometimes this is because the lender has changed their criteria since you took the mortgage out, including the upper age limit. Or it might be that you are now closer to retirement and the lender is concerned about your pension income being high enough.
Generally it is easier to port a mortgage if you’re moving to a home with a lower value than your current property. If you are concerned about whether you’ll get approval to port your deal, talk to a Mortgage Broker. We will explore the criteria and your financial situation to recommend a way forward.
What are the differences between a lifetime and a standard mortgage?
A lifetime mortgage is a very different product from a traditional mortgage. Instead of you making monthly repayments, a lifetime mortgage pays you income from the equity in your home.
A lifetime mortgage is a loan secured against your home that releases tax-free cash. It is often seen as an alternative to downsizing to release funds for your retirement.
Lifetime mortgages are available to homeowners aged 55 or over. You can take the money as a lump sum, as a series of lump sums or as regular monthly payments. No repayment is required until you die or move out of your home into long-term care.
How can a Mortgage Broker help?
The team at Bespoke Mortgages are experienced mortgage professionals who explore all the options to achieve your property goals. We help people in all kinds of situations, from First Time Buyers to clients who are remortgaging, to those looking to move home later in life.
We’ll ask you about your specific situation and property goals and then compare mortgage criteria, interest rates and fees to recommend the most suitable approach. We support you through applying for a mortgage and at every step until completion.
YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
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