Published on May 31st, 2015 | by Pete0
Mortgages for older people – what you need to know!
The pages of UK newspapers have recently featured stories about older borrowers finding it harder to access mortgage finance. At a time where we are living longer, working longer and first time buyers are also getting older it seems bizarre that some lenders would be placing age limits for their mortgages.
However some lenders have done just that. Introducing a maximum age limit of 65, by which time your mortgage needs to be paid off. This means if you are aged 41 or over and want a 25 year mortgage you may find it harder to get a mortgage loan.
A recent survey conducted on behalf of Ipswich Building Society identified that 39% of mortgage borrowers were concerned about accessing a mortgage when they were older and 45% were concerned that they would need to pay a high mortgage rate than their younger counterparts.
Recent changes in mortgage regulation (the Mortgage Market Review or MMR) have seen some lenders take a stricter stance on mortgages for older people. This new regulation was designed to remove excessive or unaffordable lending and is a positive move for the financial services industry. However, it has had the unintended consequence of making it harder for some types of mortgage borrowers to access mortgage finance. These include mortgages for over 60s and mortgage for over 50s. Whilst some lenders have decided to restrict lending to these age groups, there are mortgage lenders who will help and provide mortgages for older people. These tend to be smaller lenders who use manual underwriting (that’s real human beings) to make their lending decisions rather than an automated process. Some lenders such as Ipswich Building Society take a pragmatic approach to retirement mortgages and seek to ensure the mortgage is affordable for the borrower whilst taking the time to consider their personal circumstances.
Many mortgages for older people are used to help other family members get onto the property ladder or to adjust a property to be suit health needs. Research conducted for Ipswich Building Society identified 11% of mortgage borrowers thinking they would have a mortgage in retirement to support home improvements with a further 18% moving to a larger property. 6% would look to provide a deposit to a family member and 8% would indulge in a holiday home.
There are options for mortgages for older people. If you need a mortgage that will continue in retirement then contact a mortgage broker to find a lender that will best meet your circumstances or if you are happy to contact lenders directly; ask them for their maximum lending age and if they offer manual underwriting.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE