Are you too old to get a mortgage?
There was a time when the aim of those over 55 was to be completely mortgage free – however in recent years, there are plenty of people who are heading for retirement yet are still looking for a mortgage on their home.
You may be looking for a new home, or just want to remortgage your current home to free up some extra cash ready for your retirement but how simple is it to get a mortgage if you’re an older borrower?
Will the bank lend me money?
Historically, banks and building societies have been somewhat reluctant to offer loans or mortgages to older borrowers – those over the age of 55 may have been able to get a short term loan or remortgage however the upper limit is usually 75.
Recently, banks have become a little more open to lending to older borrowers, recognising the fact that people are now living – and working – for much longer, often past the age of retirement.
However, if you’re in your 50s and you’re hoping to take on a mortgage, you might have to meet some strict criteria from the lender before being accepted.
Will I be accepted for a mortgage?
If you’re approaching retirement age – or if you’re already retired – you’ll need to prove that you have sufficient funds or income to be able to repay the mortgage.
This is exactly the same process as any younger, working borrower will have to go through, but if you’re retired you’ll need to show evidence of any income from pensions or investments.
If you are concerned that your income stream along may not be enough to persuade the lender you are still a sound borrower then one option could be to find yourself a guarantor. A guarantor act as security, agreeing to cover any of your repayments if you are no longer able to do so. Becoming a guarantor for someone is a serious commitment to make so you’ll need to make sure that they have thought it through and can afford to do this on top of their own outgoings.
Will I need a specialist mortgage?
Depending on your age, your financial circumstances and the bank’s lending criteria, you may well be able to apply for a standard mortgage, in the same way that any other borrower would.
Some lenders may have products which are specifically designed for the older borrower, such as equity release however this is quite a bit different from a mortgage – read our guide below for more more information. If you’re thinking about a mortgage or other specialist product, it is always wise to seek independent financial advice before going ahead to find out if it’s going to be the best move for you to make.
Speak to a mortgage broker
If you’re over a certain age and worried about options for borrowing, then it may be worth speaking to a mortgage adviser. They will be able to review your current financial situation, and look at the best possible options for you.
If you do need to apply for a specialist mortgage for older borrowers, then a broker will normally have access to deals that you might not be able to get elsewhere.