Mortgages for the over 50s

Finding mortgages for the over 50s can be harder for those approaching or past the retirement age. You may want to embark on home ownership for the first time after a life of renting. Perhaps you want to take out a loan to purchase a nicer home than your previous one - a dream home in which to retire. You might want to purchase a home for your children to help them realise home ownership. Whatever your reason, borrowing becomes more difficult once you hit the retirement age. Lenders are hesitant to give mortgages to this age bracket because of the improbability that the borrower will live long enough to pay off the mortgage in its entirety.

There are options for you if you do indeed need to finance your home at this age. If you are past the age of 60, you will not be able to get a 30 year mortgage, but possibly a 20-25 year one. If you are past the age of 65, you lessen your mortgage period to 15 to 20 years, and past 70 will be 10 years or less. The greater your age, the less time your lender is going to want to give you to repay the loan. There are also different types of mortgages for the over 50s that you will need to consider. You will need to decide upon a fixed or variable rate and a repayment or interest only mortgage. These decisions all depend upon how you want the loan to function, and what your needs and payment abilities are. If you keep your goals within reason and within your means, you should be able to work out a mortgage at retirement age that meets your needs.

If you cannot get mortgages for the over 50s because of age or other factors, you have some other choices. You may be able to find a close friend or family member who would be willing to guarantee your loan. This is similar to a parent or guardian cosigning for their child’s first loan. It guarantees that the lender will be paid back even if the borrower loses the ability to pay. If this is impossible, consider downsizing to a smaller more affordable property to give yourself more equity. You can also take out a cash loan, but the interest rate will be much higher than that of a mortgage would be. You may also have to use your home as collateral, meaning you could lose it if you fall behind on payments. If you are dead set to buy that dream house and all else has failed, you can consider an equity release. This should be a last resort because your children will be forced to settle the debt plus interest upon your death.

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