How Just Mortgage Brokers Can Help You
For people who are over 55, it can sometimes be difficult to get accepted for a mortgage. Even those with a good credit history, equity in their property and an exemplary history of making previous mortgage repayments can get turned down.
Couple this with the fact that as you enter your retirement years you are less likely to have the same level of income as you have had previously, getting a mortgage can prove to be more complicated. But this is where we can set you down the right path.
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Getting a Mortgage Aged Over 55
The most important thing to remember when you are trying to get a mortgage if you are over 55 is that you need to be able to prove to the lender that you will be able to make the repayments. As you are more likely have a shorter mortgage term, and therefore higher payments, this can be significant. If you are planning on retiring, you will need to be able to prove that your income from your pension, investments and annuities will be able to cover your repayments.
The main difference between an equity release plan – such as a lifetime mortgage – and a regular mortgage for over 55s is that instead of having the loan for the rest of your life, you can choose the length of time that you want the loan to last. You must be able to pay the loan off at the end of the term, however, and be able to show the lender that you have a repayment strategy. For most people, this will be the sale of the property, or selling of another asset.
With an over-55 mortgage, you also have no safeguards against problems with meeting your mortgage repayments. Unlike an equity release plan where no payments are required, a mortgage for over 55s requires regular monthly repayments to be met. That means that your home is at risk if you can’t manage to keep up your mortgage repayments.
One advantage that an over-55 mortgage has over an equity release plan is that the accruing interest is covered by the monthly payments; this contrasts with lifetime mortgages where the interest is rolled up over the years and repaid the property is sold, sometimes substantially reducing the value of any inheritance from the property sale.
Lending to Older People
There are some lenders who will lend to older people but they usually have a maximum age limit by which the loan must be repaid – usually around 70-75 years old. This can make it a challenge to get a mortgage in some cases, but luckily there are some solutions out there for those who are heading into retirement and looking for a mortgage.
The mortgage for over 55s isn’t an equity release plan, but rather works in a similar way to a standard mortgage. They are usually offered by bigger lenders as smaller institutions often don’t have the capacity to offer a mortgage for older people.
How Just Mortgage Brokers Can Help
There are a number of mortgage lenders who offer mortgages for over 55s and, as the population ages, this is only likely to be increase. Fortunately this means more and more options, and hopefully ever-improving deals to make things easier for over 55s to be able to get a mortgage.
To be able to really understand what might be the best deal for you in your specific circumstances, we recommend speaking to one of our affiliated Equity Release Council members. Why not get in touch today to see what your options are?