Later Life Lending 55+
Extending Your Mortgage Term
If you’re unlikely to pay off your mortgage by the agreed date at DWG we can look to extend your mortgage term. Hopefully we will be able to move all or some of the loan to a repayment basis and by extending the term of your deal the monthly repayments might be more affordable, so allowing you to pay off the capital, subject to affordability.
If your existing lender will not consider letting you take a new product and/or switch to repayment it may be possible that we can look to switch to a provider that will. Many specialist and mainstream lenders now allow some people to borrow into later life and therefore allow them to stay in their home.
When thinking about borrowing into retirement you need to consider how much income you will have in retirement, how long you want to borrow the money for, and how you’ll ensure you’ve paid everything off by the end of the term.
As the state retirement age is creeping closer to 70, most lenders will accept that people are likely to be able to continue working until age 70. That means they can base their affordability calculations on earned income until then. However, if you need the term to go beyond age 70 then those same calculations will have to be based on your potential pension/investment income only. It’s not impossible though and quite a few lenders will nowadays lend to age 85 and in a small number of cases to age 90.
As with any mortgage however, the better your credit history and income vs expenditure, the more likely it is for you to be approved. Some lenders will let you take out a mortgage that will not be paid off until after you retire. However, you will need to prove that your income into retirement will be enough to cover your mortgage repayments throughout the full term of the mortgage.
If you haven’t retired yet, you may need your pension provider to give confirmation of:
- Your expected retirement date
- Your current pension pot value
- Your expected retirement income
If your children have flown the nest, you may have considered downsizing. This can be a good way of releasing some of the capital in your home either to help you live a comfortable life or to provide a cash deposit to a child or grandchild to help them onto the property ladder.
Nowadays downsizing is not necessarily about getting a smaller property. Many people look to move location to elsewhere in the country where they can get more for their money.
These range from using your saving, looking at available state benefits and investments to asking your children for financial assistance. The most important thing you can do if you’re on an interest only mortgage is to act now and plan for the future. We highly recommend contacting an Independent Financial Advisor to discuss these options.
At DWG we will look into the best option for you.
Contact an advisor