Posted on: Monday, October 5, 2015
Mortgages for older borrowers
With the UK population living longer and working later in life, it comes as no surprise that our mortgage requirements are also beginning to change. High house prices have made it all the harder for first time buyers to get on the ladder and many will not buy their first home until they are in their thirties.
In addition many of those entering the market for the first time are choosing longer mortgage terms, possibly as long as 35 or 40 years, in order to make their loans more affordable.
The Council of Mortgage Lenders recently published figures revealing that there are currently 11 million people in the UK aged 65 and over – representing around 17% of our population. By 2034 this is expected to rise to 17 million, or 25% of the population.
That could see more borrowers with a mortgage beyond the current standard retirement age. Lender criteria has got tougher and lenders have typically capped the maximum age to which they will lend, even when it can be show the mortgage would be affordable.
After deciding to relocate in order to be closer to their grandchildren, our clients approached the mortgage service for the Guild of Professional Estate Agents looking for advice. Both applicants were already retired and in receipt of a combination of private and state pension income.
The couple were looking for a mortgage term that would take them up the age of 75. Using the proceeds from the sale of their current property, the couple were able to put down a sizeable deposit. After discussing costings with their mortgage adviser, they felt comfortable that their pension income would be sufficient to support the mortgage payments.
While some lenders would not allow a mortgage term running past the age of 70, the couple’s mortgage adviser recommended a competitive 5 year fixed from a high-street building society. It was able to take a more flexible approach enabling them to secure the mortgage term up to the age that they required.
Guild Mortgage Service, Provided by London & Country Mortgages
YOUR HOME OR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
We are required by law to conduct anti-money laundering checks on all those selling or buying a property. Whilst we retain responsibility for ensuring checks and any ongoing monitoring are carried out correctly, the initial checks are carried out on our behalf by Lifetime Legal who will contact you once you have agreed to instruct us in your sale or had an offer accepted on a property you wish to buy. The cost of these checks is £60 (incl. VAT), which covers the cost of obtaining relevant data and any manual checks and monitoring which might be required. This fee will need to be paid by you in advance of us publishing your property (in the case of a vendor) or issuing a memorandum of sale (in the case of a buyer), directly to Lifetime Legal, and is non-refundable. We will receive some of the fee taken by Lifetime Legal to compensate for its role in the provision of these checks.