Martin Lewis was joined by Angellica Bell on yesterday’s episode of The Martin Lewis Money Show answering viewer questions. One question was posed by Lee, 40, whose husband plans to retire at 55. Lee wondered whether the couple were too old to secure a mortgage.
The Money Saving Expert attempted to alleviate the couple’s fears, assuring them “things have improved”.
He continued: It used to be a real problem if your mortgage term took you into retirement or pension age it was difficult to get a mortgage.
“However, things have improved.
“That’s not to say it’s always super easy and you won’t find any problems.
“For someone who is 55, looking to borrow for 30 years it can certainly be an issue.
“But I think it may well be possible for you to get a mortgage and that is absolutely a classic scenario to go in for a mortgage broker.”
As life expectancy continues to grow, the number of options available for those in their later years looking to borrow large amounts of money against their homes is also expanding.
Lenders are increasingly scrapping their maximum age limits and tapping into the retirement-age mortgage market.
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Traditionally, major high-street lenders would only let people hold a mortgage till they were 70 to 75 – meaning it had to be paid off by then.
In effect, this meant some in their 50s couldn’t get a mortgage as they may still be paying it off in their 70s, given many last 20 years or longer.
Generally speaking, smaller banks and building societies are more likely to be amenable to older borrowers as they will often lend beyond the age of 75 on a case-by-case basis.
For example, Market Harborough Building Society, Bath Building Society, and Mansfield Building Society will lend up to the age of 85 – and Leek United doesn’t have a maximum age.
The other option you may look to consider is a retirement interest-only mortgage.
A retirement interest-only mortgage is a home loan aimed at older borrowers who may struggle to get a mainstream mortgage due to age limits.
For those approaching retirement, looking to get a mortgage, it is best to talk to a mortgage broker.
They will know the smaller banks and building societies that are more likely to be amenable to older borrowers and be able to help you find specific products aimed at the over-55s market.
People should also look at standard mortgage products, as they may be able to secure one of those too.
One of the best ways to increase people’s chances of getting a mortgage in their 50s is to have a clear plan of how they will pay the loan back.
Knowing one’s budget and their specific monthly outgoings will help people understand how much they can afford.
Having a good credit score can increase the chances of being accepted, so people should look at improving their credit score ahead of a mortgage application.Internet Explorer Channel Network