Looking to sell up and move into a smaller property find out how this can be done and more importantly financed
Downsizing used to be a desire limited to people retiring when often mortgages had been paid off and their children had made their own way in life. The intention was to move from the City or Suburbs to a coastal area releasing money in the process to make retirement more enjoyable or put money as a legacy.
Fast forward and the reasons for downsizing these days is more expansive and often involves a smaller mortgage rather than the sale of an unencumbered property. For example, downsizing could be to clear personal debt; some coastal areas such as Bournemouth are actually more expensive, as can be bungalows; and as for the children moving out!
The reality is a “mortgage” is likely to live up to its Latin origin as a debt for life. I’m a professional Mortgage Broker and in this article, I explain how the changing face of mortgages is helping downsizers come to terms with this stark reality.
Traditionally mortgages finished on or before your sixty-fifth birthday. In fact, pre-90s many mortgages were directly linked to pensions, whereby the tax-free lump sum on retirement repaid the debt.
As the state retirement age (SRA) has crept upwards so has the mortgage end dates. Initially, the Mortgage Lenders were generally behind the curve offering mortgages to age 65 when then SRA was 67 but more recently they have accelerated past this with 70 being the norm for mortgages now. This forward-thinking is not without rationale as mortgages are typically long term loans and the economic sentiment is retirement ages will be pushed and pushed out as the government fails to come to terms with financing an ageing population.
The length of a mortgage often is linked to the maximum a lender will lend. This, therefore, presents a barrier to downsizers who are typically middle-aged or older.
At Niche Advice we thrive on finding even more flexible mortgage solutions from fringe building societies, lenders that partner with professional Mortgage Brokers in addition to the standard high street brands. Arranging mortgages to age 75 are commonplace for us and become easier to facilitate if you are: 10 years away from your expected retirement age; are paying into a pension, and are in a non-manual role. We can also go to age 80 for the right candidates.
Here are some of the factors which can help downsizers secure the maximum mortgage via us:
• Mortgages up to age 80 based on earned income.
• Income from an investment property.
• Pension income.
• Additional earned income such as bonuses, commission, overtime, location and car allowances.
• Carer allowances.
• We can arrange mortgages based on the youngest applicant if they can afford the mortgage in their own right. For instance, Mother and Son could work quite well.
• Multiple applicants using all 4 incomes.
• Latest year’s accounts for self employed.
• Access to over 80 mortgage lenders.
So if you thinking of downsizing and need a mortgage why not give us a try.