For many pensioners, the thought of applying for a mortgage give the impression out of the question. However, creditors have had to move with the times and so being able to obtain a secured loan as a pensioner is no longer watched upon as ‘mission impossible’.
There are some outstanding opportunities out there with major banks and constructing societies now offering mortgage deals with a high maximum age limit (for when the loan must be repaid). Here are some guidelines for taking out a loan once you reach retirement age.
Find the correct lender for your individual conditions
There is no common maximum age limit for safeguarding a mortgage, it’s up to the individual loan provider to set their own limit. With people usually living and working to an older age than with previous generations, most banks and constructing societies have reacted to this fluctuating demographic and raised the maximum age a borrower must be when the mortgage reaches adulthood. Here are the maximum age limits of some major high street creditors:
RBS, Nat West: 70 years
TSB, Santander, Virgin: 75 years
Halifax, Bank of Scotland, Lloyds: 80 years
Nationwide: 85 years
Some creditors, such as HSBC, say they would like the mortgage to be repaid by the time the claimant reaches retirement age, but it is prepared to consider separate environments.
There are also a number of smaller creditors who have no upper age limit. These include:
Bath Building Society
Cambridge Building Society
Teachers and Version
Dudley Building Society
National Counties Building Society
Hardened Building Society
Leeds Building Society
Smaller creditors like the ones recorded above are usually more flexible if you essential more time to pay off the loan, which can create a huge difference.
These creditors are constantly changing their deals; remember to compare the mortgages on offer within the market to safeguard you get the best product possible.
Have the right information on hand
When it arises to the application process, your possible mortgage creditor will want to know the following details. You can also find this information from your retirement pension provider:
The date you expect to retire
The current value of your pension pot
Your expected retirement income
You will also need to show you have a good credit history and classically will have to supply extra proof of post-retirement income asked for by the bank or constructing society. You should also, in turn, make sure you ask the right questions of your creditor such as:
How much can I borrow?
What’s the yearly interest on the mortgage?
What’s the extreme loan-to-value (LTV) allowed?
Contact a mortgage broker
A mortgage advisor can be particularly helpful when watching for a mortgage once you’re in retirement. They’ll use tools like an in-depth mortgage calculator to show what you can actually afford as well as which creditor is best for you.
Location is key
Don’t settle for a mortgage you’re not totally happy with just because you feel that, as a pensioner, you need to take what you can get. As well as brilliant mortgage opportunities being existing, there are some brilliant assets to match. Whether you’re searching for a new home or a current property, you will be able to find a mortgage that is suited to your economic position.