Am I too old for a mortgage?
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Am I too old for a mortgage? Part 1
James Bull talks us through the mortgage options for older borrowers.
What are the mortgage options available for older borrowers in the UK? What are the key differences between traditional mortgages and mortgages for older borrowers?
There are actually many options available for older borrowers on a mortgage – more than you might think. Quite a few lenders have no maximum age, which is really helpful.
The main difference is that once a mortgage takes an applicant past retirement age, then lenders tend to factor in your retirement income when calculating how much you can borrow.
What is the maximum age for mortgage applications in the UK? Is there an age limit?
This varies between lenders. A lot of the high street lenders will only lend up to retirement age or age 70-75. But we do have many lenders with no maximum age limit and are very flexible.
Can older borrowers still get a mortgage if they are retired?
Absolutely. If you’re retired, the only difference is that the amount that you can borrow is going to be based on your pension income.
How does age affect the mortgage approval process for older borrowers?
Getting the mortgage approved is no different. The process is exactly the same as any other mortgage, regardless of your age.
How old is too late to get a mortgage? At what age are you refused a mortgage?
We’ve got lenders with no maximum age so it’s never too late as such. There’s no specific age where you’ll be refused a mortgage, so there shouldn’t be a problem.
Can I get a 20 year mortgage at age 55?
Yes, this should be absolutely fine. In this example, the mortgage will finish when the applicant is age 75. A lot of lenders will just require that the applicant is paying into a pension, but apart from that it should be fine.
Can a 40 year old get a 30 year mortgage?
Yes. In this example, the mortgage finishes at age 70 as opposed to 75 as per the last question. A mortgage finishing at age 70 should be okay with practically all mortgage lenders.
What are the eligibility criteria for obtaining a mortgage as an older borrower?
The main thing is that the amount that you can borrow will be based on how much you can afford. We take all income into consideration – that includes your state pension, private pensions and employer pensions.
We also come across a lot of people with unused pension pots – they’re not even taking an income from them. We can take those into consideration as well. As a mortgage broker we just tie everything up and calculate what can be borrowed based on that.
What documentation is required for mortgage applications as an older borrower?
There’s no difference at all. You’ll need proof of ID, usually your passport and proof of address with a driver’s licence or a utility bill. You need to prove your income, so that means the documentation for your pensions, and proof of deposit. If that’s coming from savings, it’s just your savings account and bank statements showing your income and expenses.
How does the lender assess the affordability of a mortgage for older borrowers?
We take all income into consideration – your state pension, private employer pension and any other funds you’ve got. We collect everything up and then calculate borrowing based on that.
The actual amount that can be borrowed does vary widely between lenders. That’s where we come into our own as brokers, because we’ll be able to find a lender for the amount required.
Are there any specific mortgage products tailored to meet the needs of older borrowers?
You may be surprised to know that you can just get a normal mortgage with a standard lender – particularly those with no maximum age. But there are specific products available on top of that.
That includes the RIO mortgage, which stands for retirement interest only. On those mortgages, clients just pay interest for the rest of their lives and the property gets sold on death.
We also have equity release mortgages.These have no payments on them at all and the interest just rolls up. Both those products, the RIO and equity release, are available to anyone over age 55.
Is it possible for older borrowers to obtain a mortgage with no income or a reduced income?
In those circumstances, you may be restricted to equity release mortgages, because there’s no payments on that mortgage. The interest just rolls up. No payments means no affordability checks, so that could be an option if the rest of the client’s circumstances fit.
How does remortgaging work if you are an older borrower?
The remortgage process itself is exactly the same regardless of age. At JB Mortgages we deal with remortgages every day – so if anyone wants to get in touch, we’re happy to guide all our clients through the process.
Before we come back with Part Two, can an older borrower get a Buy to Let mortgage?
We’ve got many lenders with no age limits on Buy to Let mortgages, so that shouldn’t be a problem at all.
YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.
THE FINANCIAL CONDUCT AUTHORITY DOES NOT REGULATE MOST BUY TO LET MORTGAGES.
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Everyone’s different. You might be self-employed. You might have some credit history issues – whatever your situation, we will find the most suitable product available to you from across the whole market.
Am I too old for a mortgage? Part 2
We continue the conversation on mortgage options for older borrowers with James Bull.
What factors should older borrowers consider when choosing a mortgage term?
If we’re looking at a capital repayment mortgage, the term will affect the monthly payments. We do need to make sure they will be affordable. If it’s an interest only mortgage, the payments are going to be the same, regardless of the term.As mortgage brokers we’ll advise our clients on the right term that will meet both their own circumstances and the lender’s criteria.
Are there any special considerations for older borrowers when it comes to interest rates?
Interest rates for all borrowers should be similar to general mortgage interest rates. We always give our clients a personalised quotation before they proceed with us.We’ll always make sure that our clients have enough information in advance to make an informed decision as to whether or not the mortgage will be right for them.
How does equity release work and is it a viable option for older borrowers?
Equity release is available to anyone over 55. There are no payments on it, so the interest rolls up and the property gets sold to repay the mortgage on death. It’s definitely a viable option for people in certain circumstances.What steps can older borrowers take to improve their chances of mortgage approval?
The first step is to contact us at JB Mortgages. As your broker we’ll complete a fact find and get details of your circumstances to give us a full picture. Based on that we’ll research the options available with our lenders.If we spot something that’s not quite right or something that needs to be done to improve someone’s chances, we’ll give you personalised advice on what you can do.
How does age impact the maximum loan amount for an older borrower?
If you look at lenders with no maximum age, any impact on how much can be borrowed should be minimal. The amount you can borrow is based on your income.Can I still get a mortgage as an older borrower if I have bad credit?
Equity release mortgages have no credit checks, because there’s no payments on them and no affordability requirements. Those mortgages in particular are very good for people with bad credit, because there are no checks.With standard mortgages and Retirement Interest Only mortgages, you do need good credit. But we might have a limited number of lenders that can help those with bad credit, depending on the specifics of a client’s circumstances.
If you’re concerned about your credit, get in touch with us and we’ll see what we can do.
Can older borrowers still access mortgage advice and support from a financial advisor?
Specifically at JB mortgages I can say for sure that we’re happy to give advice to clients of any age. There are no problems at all there.If you’re an older borrower looking for advice, just get in touch with us. We’ll review your circumstances and give you personalised advice about getting the right mortgage.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.
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