I'm Over 60: Am I Eligible for a Mortgage?
Just because you have reached retirement age it does not mean that you cannot still get a mortgage, but it does mean lenders will be a lot stricter with you when it comes to how much you can borrow.
It’s all about risk when it comes to obtaining a mortgage and unfortunately the older you get and the less time you have to pay back the mortgage the riskier an investment you become.
These few questions should help you assess whether you will be eligible for a mortgage.
1) Why Do You Need The Mortgage?
- A) I want the mortgage to pay for a buy-to-let property to fund my retirement
- B) I want to buy the house for a family member
- C) I want to upgrade my property
2) Are You In Full Time Employment?
- A) No, I’m not in full-time employment but do have a regular income coming in
- B) I work part-time
- C) I am no longer employed and living on my pension
3) How Do You Intend To Pay Back The Mortgage?
- A) I have savings/expect a significant windfall in the next few years
- B) I intend to repay it by using savings/odd job work
- C) I have no means at the moment of paying back the mortgage
4) Do you have somebody Who Could Act As A Guarantor?
- A) My family have agreed to act as guarantors
- B) I have not spoken to anyone about this but I think there is
- C) I have nobody to act as a guarantor
5) Do You Own Any Other Property?
- A) Yes, I have a few properties
- B) I own one property
- C) I own no other properties
Mostly A – A Good Investment
From your answers it seems like a mortgage lender would view you as a good investment. The main question any mortgage lender will ask is why you need to get a mortgage at the age of 60. A lot will depend on how much you want to borrow. 7It is very unlikely that a mortgage lender will offer you above 60% of the property’s value, simply because you might not have enough time to pay this back.
When assessing whether you can get a mortgage a lender will look at affordability and how you’re going to pay it back. If you have other properties already and have paid off the mortgage on these this will work in your favour as a lender knows you can always sell one of these to pay for the mortgage.
If you have a regular income coming in from either a pension or savings this will also work in your favour.
A lot of mortgage lenders will also request that somebody in their 60s will have somebody to act as a guarantor for the mortgage and they might want to carry out checks on the person, but from your answers you stand a good chance of obtaining a mortgage.
Mostly B – Affordability Might Be An Issue
It does not sound like you are still 100% sure as to how you are going to pay back the mortgage. In order to present yourself as a desirable borrower you will need to make sure you have a set budget and set income coming in and an emergency back-up plan in case you start to struggle with your payments.If you plan to use some of your savings to pay off the mortgage it might be a better idea to use this as a larger deposit for the property and reduce your mortgage payments. If you are buying the property to rent out or for a family member you might want to ask them to come in on the investment and share the burden.
Mostly C –A Risky Investment
Unfortunately from your answers a mortgage lender would not be willing to offer you a mortgage. If it is not essential that you buy a property or upgrade you should maybe consider holding off getting a mortgage.If you have nobody to act as a guarantor and no means of paying back a mortgage your chances of being approved are close to zero. It might be an idea to enjoy your retirement in rented accommodation instead.
Paying back a mortgage when you are retired is no easy task, but it is possible. A lender will not lend to you unless they deem you to be a good investment. Each lender will have different criteria when it comes to lending to people in retirement. It is worth visiting a financial adviser to look at your options, an adviser will be able to compare all the different lending criteria of mortgage lenders and hopefully find you the best deal.
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