Whether you’re moving house, looking to buy a second home, or you’d like to remortgage an existing property, there are a multitude of reasons why you may be looking to get a mortgage over the age of 55.
Many lenders are reluctant to offer mortgages to those who are in the later stages of their life, often due to concerns that the borrower will be unable to repay the loan in full.
Thankfully, there are some lenders who are willing to approve applications from older borrowers. If you’re looking for a mortgage past the age of 55, here are just a few things you’ll need to take into account.
Proving your ability to repay
No matter your age, you’ll face many of the same mortgage application hurdles that other potential borrowers experience. For example, you’ll need to prove your ability to repay the mortgage, where you’re 25 or 55.
If you’re nearing retirement, lenders will want to know how you intend to repay the mortgage once you’ve finished working. You may have to provide evidence of pensions, investments, annuities or anything else you intend to use to fund your mortgage repayments.
Higher repayments
As an older borrower, you may be refused longer term mortgages of more than 25 years. As a result, you may face higher repayments spread out over a shorter period of time.
For example, if you were to borrow £150,000 at an interest rate of 3.92 and repay it over a period of 25 years, your monthly repayments would be £785. In contrast, this same amount of debt over 35 years would be just £657 a month.
Downsizing isn’t necessarily guaranteed
Many people assume that downsizing their home in retirement would be a relatively straightforward move. Since you managed to convince a lender that you could afford your current mortgage, you may assume it’ll be even easier to secure a mortgage for a much smaller property - especially if you already have equity in your current home. Unfortunately, this isn’t necessarily the case. Lenders have tightened their criteria in recent years and so even if your original mortgage application is approved, your attempts to remortgage won’t necessarily be as smooth sailing. You might also face challenges if your financial circumstances have changed since you got your original loan.
A mortgage broker can help you identify the lenders most likely to say ‘yes’
A mortgage broker will compare hundreds of lenders and mortgages on your behalf before pointing you in the direction of the providers most likely to approve your application. Your broker will take your age and financial circumstances into account before highlighting the mortgages most suitable for you.
To learn how TaylorMade can help you get a mortgage over the age of 55, please get in touch with us today.
