I'm Over 50, Can I Get a Mortgage?
As someone who fits right into this category of borrower and with experience of trying to get a lender to agree a mortgage for myself recently, I can say it's a challenge but it's possible.
There has been a lot of change over the years since the financial meltdown and many lenders have made it a lot tougher for everyone to borrow money; which I would say is not an altogether bad thing but it is a painful thing when it comes to being a bit on the more grown-up side of life and being made to feel like you’re passed it at age 50.
I have spoken to many of our clients who feel the upper age limits have been imposed in an arbitrary and discriminatory manner against older borrowers.
The same is true for some investors in the Buy to Let market which has also seen the similar restrictions being introduced. For some investors they find it very difficult and more expensive to retain their investment properties because of the introduction of stricter lending policy.
Unexploited market potential
Just think about the population, 12% of us are already over the age of 65 and by 2030 more than 25% of the population will be over 65. Younger people are far more likely now to be in their late 20’s and early 30’s before they have saved sufficient money to buy a property - this leaves great potential in the market of older borrowers.
With better health, more flexible retirement arrangements and with far more people working on into later life, the size of the potential market for older borrowers is growing along with calls for change to age limited lending.
In response, the Building Societies Association has begun a review of lending to see if they can open the age limits up a little. There are a few lenders who have continued to lend to older borrowers but lending is very closely controlled.
Many borrowers either buying a new home, remortgaging or investing in buy to let properties are finding some of the very best interest rates that there have ever been, so why not older borrowers as well.
Preparing for a mortgage as an older borrower
So if you are looking to secure a mortgage there are several things you will need to consider - they are:
• Do you already have retirement plans running and money saved to replace your income if you stop working?
• Do you have a job which is physically possible to continue past your state retirement age?
• What is your credit rating?
• Do you have a regular and secure income and are you able to prove it?
All lenders are going to ask for some firm evidence that you can afford to pay the loan over the term of the Mortgage.
There are over a hundred lenders in the UK at the present and each one has a different lending policy.
Some will only lend to age 65 or while you continue to work, others will use state retirement as a cut off, others will use age 70 or 75 provided you are realistically able to continue working. A few will take a view on your income and ability to pay the proposed mortgage and will take a more sensible view in this respect by asking themselves if lending to you is a responsible thing to do.
There are also some new lenders in the market, Metro Bank for one, who appear to be growing a very good business which is doing good work in the lending market and crucial for our age group. A huge advantage of Metro Bank is that it has not imposed an arbitrary age limit on borrowing.
With so many conflicting views on the subject of older borrowers, if you're over 50 and looking for a mortgage, the best thing to do is contact an adviser and have a chat about what your options could be.