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It has traditionally been more difficult for people aged over 50 to be approved for a mortgage. Thankfully, that’s changing.
Below, you can explore the range of currently-available mortgage options for over-50s.
No. There is technically no maximum age limit for when a UK resident can apply for a mortgage. In fact, The Equality Act of 2010 ensures that lenders don’t discriminate against borrowers because of their age.
Based on that law alone, you could theoretically get a mortgage regardless of whether you’re 18 or 80. Of course, things are a little different in reality. Lenders also have a responsibility to ensure that they only approve mortgages to applicants who can afford the repayments without experiencing financial hardship, so older applicants will find it much more difficult to obtain mortgage approvals than their younger counterparts.
For example, if you’re 50 years old and you apply for a mortgage with a 25-year loan term, the lender might be sceptical about your ability to repay the loan for the next 25 years.
In light of the 2008 financial crisis, more-judicious lending by banks and mortgage providers since then has led to some age restrictions on specific mortgage products. With this in mind, it’s worth checking with your mortgage broker to find out which lenders offer mortgages suitable for your needs.
If you’re over 50 and applying for a mortgage, you’ll need to provide a greater amount of information regarding your current and future financial position than younger borrowers. If you’re already retired, or about to retire, the less likely you are to be able to fully repay the money you borrow.
To minimise the level of risk and also satisfy responsible lending obligations, a lender will ask you to supply detailed information about your employment and the income you earn from all sources, including any pensions you receive. The usual information about credit history and any other outstanding debts and your ongoing expenses is required as well.
If you’re over 50, you’re eligible for all types of mortgages available on the market, such as fixed rate, variable, interest-only or offset account mortgages, provided you can provide sufficient evidence that you’ll be able to repay the mortgage. Some lenders even have specialist mortgages for older borrowers that can make it easier to get a mortgage.
The best way to start searching for an over 50s mortgage is to find out which banks and building societies are most likely to offer a mortgage to older borrowers. These are likely to be smaller banks or building societies, some of which may offer products specifically targeted at an older age range. You can do this by either speaking to a mortgage broker or browsing online. Once you’ve worked out what mortgages are available to you, you should compare them to ensure you get the best deal.
It’s reasonable to be anxious about your chances of being approved as an older borrower. One of the best ways to make sure these anxieties aren’t fulfilled is to have a clear repayment plan, including your budget and monthly outgoings. Checking your credit score and taking steps to improve it prior to your application will also help your chances.
If you’ve been refused by a lender, don’t worry! This doesn’t mean you’ll be turned down by a different lender. To improve your chances, consider applying to specialist and over-55 lenders, or maybe consider a lifetime mortgage. This is a long-term mortgage that is secured against your house, though bear in mind that it’s not the cheapest option due to high-interest rates.
Generally, disability benefits are considered a valid form of income by most lenders. Therefore a mortgage application for someone on disability benefits is not treated any differently from an application where someone services their loan with other forms of income.
Like any applicant for a mortgage, the lender will review whether the amount of income support you receive is sufficient for you to comfortably repay the loan.
Most lenders will review your application on a case-by-case basis. Your eligibility for a mortgage will depend on the amount of income you receive and how much of this can be used to service a loan.
Other factors including your age, assets and debts will be assessed by a lender on an individual basis.
Each lender will have different eligibility criteria, so it’s best to speak directly with your mortgage broker or lender to determine whether a mortgage is suitable for you.
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