What Is The Oldest You Can Still Get A Mortgage
Theres no legal limit on the maximum age you can be when applying for a mortgage. However, many lenders impose their own rules.
Typical mortgage age limits are:
-
under 65 to 80 to take out a mortgage
-
under 70 to 95 when the mortgage term ends.
So even if you are below the maximum age when you get a mortgage, you might have to opt for a shorter term. For instance, if you get a mortgage at 65, lenders might say it can only last 15 or 20 years, meaning monthly repayments would be higher, though, on the upside, you would pay less interest.
Your Reasons For Buying Or Refinancing
If youve lived in your current home for many years or have your mortgage paid off, you might wonder why youd even want to move or refinance your home. Does it make sense to go through the entire refinancing or home buying process again?
For many seniors, the answer is yes. Your reasons may vary, but many seniors consider refinancing or moving for the following reasons:
- Youre planning on needing a safer or more accessible home soon.
- Your family home feels too large now that your children have moved out.
- You dont want to take care of upkeep or cleaning anymore.
- You need to access the equity in your home.
- Your current state or city is too expensive.
- Your mortgage payments could be lower.
- A new mortgage would lower your interest rate.
- You want to change your loan term.
- You want to be closer to your
Regardless of your motivation for refinancing or buying, youll want to make sure your choice makes sense for your financial situation.
When Does It Make Sense To Get A Home Loan As A Senior
Many retirees and seniors are opting to have a mortgage instead of paying off their loan balance or buying a new home with cash.
This can free up savings for other uses. Necessities such as food, transportation, and longterm care are among the highest expenditures for seniors.
Other than freeing up assets, there are a number of reasons seniors may be considering financing a new home purchase.
- Sizing down Empty nesters may size down to minimize square footage, maintenance, and mortgage costs
- Physical challenges Cleaning and repairs can become physically taxing. Many seniors purchase a new home to cut down on upkeep
- Supplementing fixed income More and more senior citizens are finding it difficult to live on their fixed incomes. Retirees may decide to sell or refinance their homes, finance a new home purchase, and use the equity cashed out to supplement their income
- Moving to a new area According to one survey, as many as 40 percent of retirees are venturing out of their home state looking for better weather, recreation, favorable taxes, and other benefits
If any of the above applies to you, it might be worth it to consider financing a home in retirement.
Dont Miss: Reverse Mortgage Mobile Home
You May Like: What Is The Highest Interest Rate On Mortgage
Is It Wise To Buy A House In Your 50s
Buying a home after 55 is a major decision that is sure to impact your retirement. While some financial companies will give out loans to older buyers, most are wary of this for several reasons. According to personal finance expert David Ning, it’s unwise to get a new 30-year fixed mortgage in your 50s.
Which Lenders Offer Over 50s Mortgages
Most banks and building societies offer mortgages for people over the age of 50, including Nationwide, Lloyds, Halifax and NatWest. If youre in your early 50s and still in full-time employment, youre likely to have a good choice of deals whether youre a first-time buyer or remortgaging your home. However, your options become more limited the older you get and the less income you receive.
Recommended Reading: Can There Be A Cosigner On A Mortgage
Speak To A Retirement Mortgage Expert Today
Weve helped over 120,000 people find the right mortgage for their circumstances, even those with bad credit.
In fact our customers regularly rate us 5 stars on Feefo, mainly because we offer access to expert brokers who are:
- Whole of market
- Already know the lenders to go to
- Experts on retirement mortgages
- Are OMA Accredited advisors
- Have completed a 12 module, LIBF certified training course
If you have questions about later life lending and want to speak to an expert for the right advice, call 0808 189 2301 or make an enquiry.
Well match you with one of the whole-of-market brokers we work with, making sure they have specific experience of helping other customers in a similar situation to you.
The service we offer is free, theres absolutely no obligation and we wont leave a mark on your credit rating.
Ask a question
We can help!We know everyone’s circumstances are different, so if you have a specific question about getting a mortgage then get in touch.Ask us a question and we’ll get the best expert to help.
Onlinemortgageadvisor.co.uk is an information website all of our content is written by qualified advisors from the front line, for the sole purpose of offering great, relevant, and up-to-date information on all things mortgages.
The Financial Conduct Authority does not regulate some forms of buy to let mortgage.
*OMA Mortgage Approval Guarantee is subject to you providing satisfactory documentation. See T& Cs.
Mortgages For Over 60s
Plenty of lenders offer mortgages for people over 60, but your options are likely to be more limited. For instance, many lenders offer shorter terms, so you need to repay the loan over 10 or 20 years.
You have a better chance of being accepted if you have a strong credit history and if your income is high enough to cover the mortgage repayments easily. Youll almost certainly be asked for proof that your pension payments will be enough to meet your mortgage repayments.
Don’t Miss: What Is Current Rate For Mortgage
Buy To Let Mortgages For Over 55s
Over 55s are likely to be in a stronger financial position than younger applicants. As a result, you may have surplus capital in the bank to invest. The rent achieved from your buy to let can then provide you with an income during retirement.
Getting a buy to let mortgage when youre over 55 shouldnt be that difficult. This is because your investment will create an income. For this reason, most lenders will assess the amount of rental income your investment will generate, rather than your age.
Its common for retirees to invest their pension and other savings into a property or even a portfolio. Although lenders understand the demand for buy to let mortgages for retired applicants, its still something youll need to prepare for.
Mortgages For Seniors On Social Security
Social Security income for retirement or long-term disability can typically be used to help qualify for a mortgage loan.
That means you can likely buy a house or refinance based on Social Security benefits, as long as youre currently receiving them.
SSI should be counted along with retirement funds and other liquid assets to calculate the borrowers total qualifying income.
Since SSI is typically non-taxable, it can also be grossed up. That means the lender can increase the qualifying amount by 10% to 25% and help you qualify for a larger monthly mortgage payment.
For a lender to count Social Security income toward your mortgage, it will need to be documented via an SSA Award letter or proof of current receipt.
If the borrower is drawing Social Security income from another persons work record, theyll need to provide the SSA Award letter and proof of current receipt, as well as verification that the income will continue for at least three years.
Recommended Reading: What Does It Mean To Close On A Mortgage
What Should I Avoid With My Exit Strategy
It is illegal for lenders to discriminate against someone based on their age. On the other hand, lenders have a responsibility to ensure that anyone they lend to can comfortably afford to repay the loan without experiencing any undue financial hardship.
There are certain things that may not be considered suitable as an exit strategy because they are considered unreliable. Here are some examples:
- Anticipated inheritance
- Projected income or superannuation balances
- An anticipated Workers Compensation payout
- An anticipated Family Law settlement
- An anticipated employers bonus payment or wage increase
- The sale of a business
Some lenders may make exceptions and approve people with exit strategies similar to these if they can provide evidence.
How Much Can You Borrow When Youre Over 50
The amount you can borrow depends more on your financial circumstances than your age, particularly if youre still years away from retirement. Lenders will consider your monthly income and outgoings, as well as how big a deposit you have.
If youre over 60, you may only be able to apply for shorter mortgage terms of 10-15 years, while over 70s who have retired may face even tighter restrictions.
A shorter loan should be cheaper overall, but the monthly repayments are likely to be higher than a standard 25-year mortgage, so youll need to show you can comfortably afford to pay off the mortgage in a shorter time span. The amount you could borrow may be limited and youll probably need a substantial deposit.
However, there are lenders who are flexible and will make a decision based on your personal circumstances, regardless of your age.
When comparing mortgage rates, its important to have an idea of what you can afford. Use our to work out how much you might be able to borrow.
Recommended Reading: When Are Daily Mortgage Rates Released
More Seniors Are Taking Out New Home Loans
Many retirees no longer see paying off their home as part of their financial goals.
More and more Americans are taking advantage of the low interest rates and tax breaks that come with having a mortgage.
If youre sizing down, you might get a mortgage instead of buying the new place with cash. Or you might refinance for lower payments rather than paying off a chunk of your balance.
Luckily, there are plenty of home loan options for seniors today, even if youre on Social Security income. Heres what to know.
In this article
What Loan Term Is Best For Seniors
One thing for seniors to consider is how long a loan term they should get. For some, a 30-year mortgage may be a little long.
At the same time, a 30-year loan may be the best option for some based on its lower monthly payments.
The length of the term a senior gets could also depend on requirements that are specific to certain loan types.
Don’t Miss: How To Get Out Of A Westgate Timeshare Mortgage
What Is The Maximum Amortization I Can Choose
The maximum amortization that you will receive is not calculated based on your age. Lenders have specific legislation that covers the maximum amortization that can be offered. For a home purchase with a down payment of less than 20%, the maximum amortization is 25 years.
If you are retired and purchase a home with 5% down, which you can certainly do if you have the income to qualify, then your maximum amortization is 25 years.
If you are retired and purchase a home with 20% down or more, then you could have a mortgage amortized up to 30 years. No matter your age, provided you have the income to qualify for the mortgage, your maximum amortization would be 30 years.
With 35% down, you could choose a mortgage or a home equity line of credit. The mortgage has a maximum amortization of 30 years, as before. However, if you set up a home equity line of credit, the minimum payment is interest only.
With a home equity line of credit, you have no amortization. Itâs effectively infinity! If you made the minimum payments of interest only then you will never pay that line of credit off!
That begs the questionâ¦
Can I Get A 25 Year Mortgage At 65
There is no set rule for age limits on mortgages, but lenders tend to have their own cap, some of which can be as low as 55. Lenders are trying to be more open-minded and take into account that people are now living and working for longer. Some high-street lenders will have age limits as high as 85.
Also Check: Does Applying For Mortgage Affect Credit Score
Get Through The Underwriting Process
During underwriting, your lender will verify your income and make sure you meet the standards for a refinance. Your lender will also schedule an appraisal to ensure your home hasnt decreased in value. After all your paperwork clears and your appraisal comes back, youll sign on your new loan at closing.
Do Lenders Have A Maximum Age Limit For Mortgages
There is no set rule for age limits on mortgages, but lenders tend to have their own cap, some of which can be as low as 55. Lenders are trying to be more open-minded and take into account that people are now living and working for longer. Some high-street lenders will have age limits as high as 85. High-street mortgage providers tend to offer lower interest rates but they may not offer as much flexibility.
Smaller lenders, like local building societies or private banks, can offer more flexible lending criteria and some have no upper age limit at all. The interest rates may be higher, but a mortgage broker can help you access a large pot of lenders and assess your options to find the best one for you.
Also Check: How Much Should You Borrow For A Mortgage
Can I Get A Mortgage If Im Over 55
Yes, its possible to get a mortgage over 55. Although there isnt a maximum age limit to get a mortgage, most lenders do have restrictions in place. Some lenders have maximum age limits which can vary from 65 all the way up to 85. That being said, some lenders dont have any upper-age restrictions at all and make assessments on a case-by-case basis.
The main reason why some lenders have age restrictions in place is because of affordability. For instance, if youre retired, your income may be insufficient for a mortgage. Nonetheless, its likely youll have savings or investments which can cover a mortgage and thats why some lenders will be happy to consider you. Furthermore, you may still be working, so passing an affordability check wont be an issue.
On the other hand, there are lenders that will require you to repay your mortgage before a certain age. For instance, if youre over 50, certain lenders may limit the length of your mortgage term to 15 or 20 years. Some lenders may require you to repay your mortgage before youre 70, others before youre 80. Other lenders wont have any restrictions whatsoever.
The length of your mortgage term can affect the amount youll have to repay each month. Shorter mortgage terms will result in higher repayments each month, so its not something to overlook.
How To Get A Mortgage As A Pensioner
Your first step is to gather information on your finances. Get a statement from your pension or annuity provider to prove your long-term income. You should also check your credit score.
Next, do some research about mortgages for pensioners. You will want to compare the age limits, interest rates, term lengths, fees, eligibility criteria and flexibility options of the various products. There are comparison sites to help you see what is available, but a mortgage broker can give you access to a wide market of lenders and help you choose the one that is best for you.
You then need to apply for the mortgage you want. Try to avoid applying for lots of products as each application will appear on your credit history and could harm your credit score. Again, a mortgage broker can take you through the entire application to help ensure you are successful.
You May Like: Can You Quit Claim Deed A House With A Mortgage
Can You And Should You
Can you qualify for a mortgage loan? And, more importantly, does taking on such a huge debt after retirement make financial sense?
The answer to the first question depends on your income and debts. Mortgage lenders can’t deny your application for a loan because of your age. If you can prove that you can afford a monthly mortgage payment and you have a solid credit score, lenders will approve your application.
The more difficult question is the second one: Even if you can qualify for a mortgage loan in your 60s or even in your 70s, should you take on the financial burden of monthly home-loan payments at such a late stage in your life?
It’s a question without an easy answer. Jeremy Heck, a consumer law attorney at Columbus, Ohio’s Luftman, Heck & Associates, often works with clients struggling with financial challenges. He says that seniors should think carefully before applying for a new mortgage loan.
Downsizing With A Mortgage
Other seniors might want to downsize from a large home to a smaller one that is easier to care for. Depending on when these seniors bought their existing home, they might not be able to sell it for enough to cover the mortgage on a smaller residence. In such cases, they might have no choice but to take on a new mortgage loan, even if they are in their 60s or 70s.
Ron Weiner, a certified financial planner and president at RDM Financial Group in Westport, Conn., said that some seniors let emotions cloud their judgment. They like their homes too much, and they don’t want to sell them. They hang onto them even when a better financial choice is to sell a large home with high property taxes.
“They might have a house with five bedrooms and they’re empty nesters,” Weiner said. “From a pragmatic point of view it makes sense to downsize and move into a smaller home that’s easier to care for. This has to be a hard-nosed business decision. You have to discuss all the aspects of this decision, even those that are emotional and difficult.”
Read Also: Should I Use Quicken Loans For Mortgage
