Recent mortgage Q&A
Are there any mortgages for over 60s?
Unfortunately answering this question isn’t as easy as it should be as although many mortgage lenders state a maximum age to apply for a specific mortgage product you will actually find that your income is also likely to play a significant part of whether you are likely to get accepted for your mortgage application. With the mandatory retirement age being abolished and the state pension age rising to 68 many people are now working longer and so if you are still working when you apply for your mortgage you are likely to be more successful than if you are relying on an income from a pension and other savings schemes.
Moving from an interest only to a repayment mortgage
If you are over 60 and currently have an interest only mortgage and are worried about finding the lump sum at the end of it you may be able to move onto a shorter term, 15 to 20 years, repayment mortgage in order to guarantee having it paid off at the end of the term. If you have planned ahead and have built up a lump sum in preparation for paying off your mortgage at the end of the term you could use this as a deposit. If it is a reasonably large proportion of the value of your property, particularly if it is over 40% of the value of your home, you will find it much easier to find a mortgage lender that will provide you with a mortgage.
Other mortgage types for the over 60s
If you currently own your home outright and you wish to release some equity from it you may be considering taking out a mortgage on it. Due to the age restrictions on new lending for residential mortgages you are likely to find that you will not be able to take out a standard residential mortgage, especially with the stricter requirements for proving the affordability of the repayments. Therefore you are likely to find that your options are restricted to equity release mortgages. There are a number of equity release options, none of which give you a great option as all of the deals available ensure that you end up paying the lender far more than they release to you. This is either through you taking out a lump sum and then paying interest on this until your death, or your home is sold, or your lender effectively buys a percentage of your property, usually around 70%, providing you with between 20% and 25% of the equity in return. Again, when you die the sale of the property provides the money to pay the lender their 70%, with 30% being retained. The third main option is a home income plan that provides you with an income from the sale of a share of your home.
With all of these mortgages having complex requirements and conditions it is always advisable to speak to a specialist mortgage broker so that you understand exactly what you are taking on.
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