Over 50s Mortgage
When it comes to securing funding for a home as you age, your over 50s mortgage options start to dwindle, and while this can make it more difficult, it is most certainly not impossible to get an affordable loan.
Since banks are going to protect their interests, however, it is up to you to protect yours, and that means getting to know everything there is to know about your mortgage options after 50.
An Older Generation
In the past, most people would start thinking of retirement around 50, but people are living longer, and this means that they are working well into old age. 50 is officially the new 40, and while over 50s mortgage options are more difficult to get hold of, many institutions are now specializing in providing funding to those thinking about purchasing their homes at this age.
A Commitment You Can Afford
One of the most important things that any bank will want to know is whether you can afford your monthly over 50s mortgage repayments, so expect them to dig deep into your financial history. If you plan on working for the next twenty years, you need to prove your income will cover your payments.
If you plan to retire, things can get a bit more complicated. Retirees need to ensure that they can prove they’ll be able to pay their mortgage even after they stop receiving a monthly income from their full time jobs.
Over 50’s might have other income sources, such as investments or pensions, and these will often be enough to cover the overall costs of the loan.
Pay It Off Sooner
Because most lenders require that their clients pay off their mortgages before a certain age, such as 70, it is important that over 50s mortgage borrowers consider whether they will need to pay off their loans in a shorter space of time.
Usually, this requires that the lender increase the monthly payments, and while this results in the client having to pay more each month, it could also decrease the overall interest, resulting in a lower overall mortgage.
Asking The Right Questions
Before picking one of the many over 50s mortgage options available, it is important that clients take the time to locate the right product on the market, and this involves asking the right questions.
Questions such as “should I opt for a fixed or variable interest rate” and “how much of a deposit can I afford to put down” will not only affect the sort which lender you will be able to approach, but they will also influence how much you end up repaying the institution.
The Disadvantages of Borrowing After 50
Being made aware of the disadvantages of borrowing after 50 is just as important as understanding the benefits. Some borrowers have strict age limits for granting loans, and the cut-off is usually at about 65. Secondly, you might find that the institutions expect you to pay a higher interest rate.
Knowing everything there is to know about mortgages over 50 will help you make the right decision about your new home – one that you will be happy with for many years to come.
3 thoughts on “Over 50s Mortgage”
One of the best moves we made was to become debt-free long before we retired. This was a direct consequence of decisions we made when we were much younger. After we paid the 15-year fixed-rate mortgage off, we put the mortgage payment amount into savings each month for a good number of years, thus increasing our retirement nest egg.
This is an interesting article. I know of a couple who are soon going to be applying for a mortgage, and I’m looking forward to hearing about the experience from them, since they don’t have a stable past income situation. I would like to purchase a home in the future, but when and if I do, I plan to have a larger down payment, and would like the shortest mortgage possible, to decrease the amount of interest. There are plenty of people buying homes after the age of 50, and since lifespans seem to be expanding, it’s time for banks and other lending institutions to create plans specifically for this age group.
All great things to keep in mind here! I’ve always been extremely glad that not only was our home mortgage paid off very early, but also that we got totally out of debt about ten years ago.
There was always that terror of ending back there in a financial mess, and that’s precisely what made us start using cash for everything possible and cut up the credit cards. No credit cards, no temptation. 🙂
Online bills are now paid with pre-paid debit, as well as everything else that isn’t cash, like hotel rooms when traveling.
Although our credit has always been excellent, I have a feeling that it would be a nightmare trying to get a mortgage or other larger loan at this point. 🙁