It is not ‘impossible’ for older borrowers to get a mortgage, as more and more lenders are becoming more flexible in their approach to the more mature borrower.
Lenders will look to use either “earned income or “pension income” for affordability purposes, and each lender is different to when each income can be used.
The reasons as to why you may want to initiate a mortgage later in life may vary, but could include:
• Higher house prices, so it takes longer to repay the mortgage. Someone in their 40s borrowing for 30 years will be in their 70s by the time the mortgage is repaid.
• Buying a home for retirement close to family and friends
• A divorcee needing a mortgage to buy a home of their own.
• People returning from living overseas, wanting to own a home in the UK rather than renting long-term.
• Parents, or grandparents, releasing equity from their property to help children or grandchildren onto the housing ladder. The so-called ‘bank of mum and dad’. Many people may also want to unlock equity from their home during retirement to:
• Make home adaptations, to improve accessibility or make it better suited to their needs.
• Fund social care.
• Spend on ‘big ticket’ items like a holiday. These are, of course, just some reasons why you might need a mortgage. At Street Associates we will discuss with you in more detail about your specific needs and circumstances, and what your options are.