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Older Borrowers

On this episode of the Mortgage and Protection podcast we’re talking about mortgages for older borrowers with Leanne Charnley from CD Financial.

Older Borrower Mortgages

On this episode of the Mortgage and Protection podcast we’re talking about mortgages for older borrowers with Leanne Charnley from CD Financial.

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

One of the best ways to increase your chances of getting a mortgage as an older borrower is to have a clear plan as to how you’ll be paying back your loan. Really knowing your monthly budget and outgoings will really help you understand what you could potentially borrow.

As an older borrower it’s also a good idea to look at ways to increase your credit score ahead of your mortgage application. It’s always worth speaking to a mortgage advisor who can help you look at your options – it may be that there are products and strategies that you didn’t know were available to you. We’ll help you explore different ways to achieve your goal.

Can you get a mortgage after you retire?

There are definitely options open to borrowers who have already retired. As always, it’s related to your personal circumstances and whether or not you’ve got the funds available to repay the loan.

That’s the biggest thing – it’s not so much your age, as your ability to meet the monthly payments.

Should you use equity release?

Again, this really depends on individual circumstances. Equity release is a great way of unlocking the money built up in your home. If it’s something you’re considering, get in touch with a mortgage broker like ourselves. We can link you up with an equity release adviser, having explored your individual circumstances and whether or not this is an option that might suit your needs.

You will need to take legal advice before releasing equity from your home as Lifetime Mortgages and Home Reversion plans are not right for everyone. This is a referral service.

What is the age limit for getting a mortgage?

In short, no. There’s no specific upper age limit, but many lenders set their own maximum borrowing age. These generally apply when you take out your mortgage – with the limit typically around 65 to 70 – or your age at the end of the mortgage term, which could be anything from 70 to 85. However, there are some building societies that have no upper age limit. So, again, it’s a case of exploring what’s out there and what’s suitable for you.

Can I get a 30 year mortgage at age 55?

Yes, this is possible as long as you’re able to provide evidence that you’re still able to repay the mortgage once you’ve retired. That usually means you have a regular retirement income that matches the affordability criteria of the lender. If so, there’s no reason why you wouldn’t be able to get a mortgage at the age of 55.

What about 60 years of age? Is this where lifetime mortgages come into play?

Yes, there are products such as a lifetime mortgage that are available over 60. The lifetime mortgage is a loan secured against your home which does not need to be paid back until you either pass away or you go into long term care. It allows you to free up some of the equity in your home.

With these types of loans it’s important to consider the interest payable on that loan. It’s an appealing option for some that’s well worth exploring.

This is a lifetime mortgage/home reversion plan. To understand the features and risks, ask for a personalised illustration.

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

Generally it’s because lenders see older borrowers as a higher risk. As you hit retirement, you no longer have a regular salary coming in and your income is likely to decrease. That makes it more difficult to assess whether you’ll be able to keep up with your mortgage repayments once you retire.

There’s also the consideration that older borrowers are more likely to become unwell and there’s a higher chance they might not survive the full term of a mortgage. All lenders follow the Mortgage Market Review rules, which mean they have to consider whether or not a customer can keep up the repayments throughout the whole mortgage term. If that term takes someone up to the age of 95, will they realistically be able to pay that mortgage back? So it all links back to older borrowers generally being viewed as higher risk to the mortgage lenders.

Which lenders lend to older borrowers?

As I mentioned previously, it tends to be the smaller building societies that are more likely to lend to older borrowers, but it depends on individual circumstances. There are some high street lenders that may accept older customers too, depending on the client at the time of their application: how long do they want the mortgage, what kind of income they have, whether they have a private pension or state pension.

It’s difficult to name particular lenders as they change all the time, but smaller building societies do tend to be more flexible.

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

There aren’t many differences for older borrowers. As with any other mortgage you can get a fixed rate deal, tracker, offset or cashback product. It depends again on the individual circumstances and how you will be paying back that loan.

How can a mortgage broker like CD Financial help?

It’s all about expert knowledge. We’ll have a chat with you to understand your circumstances – where you are at the moment and where you want to be. That way we can place you with the right lender that we know will fit your needs and will accept you.

One of the most difficult things is knowing where to start – and good financial advice will take away that pressure. There might also be other options out there that you haven’t considered, such as equity release or a lifetime mortgage.

People are realising that there are more options available to them as they grow older. Equity release has definitely come to the forefront in recent years – especially for those looking to enjoy retirement and use the money tied up in their homes.

So get in touch today for a chat and we’ll see how we can help you achieve your goals.

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