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    • donmel123
    • By donmel123 22nd Oct 16, 9:23 AM
    • 5Posts
    • 1Thanks
    donmel123
    23 year mortgage in 50s.
    • #1
    • 22nd Oct 16, 9:23 AM
    23 year mortgage in 50s. 22nd Oct 16 at 9:23 AM
    My situation is Ive decided to move after very long time in property, Early 50s new mort (only at principal and quote stage)would be just under double what I have left now and the term would be 23 yrs (I11 left on current) taking me into mid 70s. Cant see me working until then but who knows.
    I put offer on house but hasnt been accepted yet and may not be, but reading through quote the payments for 2 yrs would be same as what i am paying now, then incr by over £100 which Im panicking in case i cant afford when i am older and poss not working. I was told it would be reviewed after the 2 years and be around what I had been paying, which is fine, I would expect changes in payment anyway, but £100plus I wouldnt. I have emailed him and will likely get response to clarify on Mon.
    Say I stayed in the house 10/15 yrs and was find it difficult I would have paid some of mort off but What would be my options. I see many things advertised about when older and to do with equity release, or theres downsizing but I think would still need some sort of mort that i prob wouldnt be able to get.
Page 1
    • AnotherJoe
    • By AnotherJoe 22nd Oct 16, 9:29 AM
    • 7,226 Posts
    • 7,733 Thanks
    AnotherJoe
    • #2
    • 22nd Oct 16, 9:29 AM
    • #2
    • 22nd Oct 16, 9:29 AM
    You are spending too much money.
    Going into a situation like this with no way out other than selling up is reckless.
    Going into a situation like this where you are struggling to afford even now (£100 leeway is nothing) is doubly so.
    Buy something you can afford and that you can pay off by the time you retire.
    • donmel123
    • By donmel123 22nd Oct 16, 10:09 AM
    • 5 Posts
    • 1 Thanks
    donmel123
    • #3
    • 22nd Oct 16, 10:09 AM
    • #3
    • 22nd Oct 16, 10:09 AM
    Joe, I can definitely afford to pay now, payments would be the same, and its likely I could pay the extra £100 a month after 2 years, its just I was told differently that it wouldnt increase by that much. I will wait for mortgage advisor to reply back Mon. The only thing I wouldnt be able to do is pay it off before I retire unless lucky enough to win lottery. I was thinking what options were open to me if I did find myself strugging later on. Surely the only option isnt to stay put for 10yrs to be mortgage free.
    • AnotherJoe
    • By AnotherJoe 22nd Oct 16, 10:31 AM
    • 7,226 Posts
    • 7,733 Thanks
    AnotherJoe
    • #4
    • 22nd Oct 16, 10:31 AM
    • #4
    • 22nd Oct 16, 10:31 AM
    Joe, I can definitely afford to pay now, payments would be the same, and its likely I could pay the extra £100 a month after 2 years, its just I was told differently that it wouldnt increase by that much. I will wait for mortgage advisor to reply back Mon. The only thing I wouldnt be able to do is pay it off before I retire unless lucky enough to win lottery. I was thinking what options were open to me if I did find myself strugging later on. Surely the only option isnt to stay put for 10yrs to be mortgage free.
    Originally posted by donmel123
    "likely" you could pay the extra £100 doesn't give me a lot of confidence you could pay it, or that its well within the bounds of affordability ! And suppose rates rise in 3 or 4 years time?

    You say "Surely the only option isnt to stay put for 10yrs to be mortgage free". Your choice is not a binary, stay put / buy something that doubles your mortgage.

    For example, you could move to a place that costs less, the same or a little more and pay over say 10-15 years instead of 23.

    From the info you've provided, you are being very reckless in spending close to your limits, having no realistic means to cope with unexpected expenses as you cant just afford a small increase, you are subjecting yourself to years of financial stress, and may be forced to move when you retire, or retire much later than you'd like or even seems possible.
    • Jenniefour
    • By Jenniefour 22nd Oct 16, 1:16 PM
    • 1,092 Posts
    • 1,063 Thanks
    Jenniefour
    • #5
    • 22nd Oct 16, 1:16 PM
    • #5
    • 22nd Oct 16, 1:16 PM
    Please think very carefully about decisions you are making now. If you are already concerned that you may not be able to keep up mortgage payments after you retire that's possibly a big red flag. There isn't anything intrinsically wrong with having a mortgage after retirement providing you know you will have enough pension/other unearned income (or big pot of savings) coming in to pay it and live without hardship. Making a decision that could mean you are faced with a big problem when you're much older and possibly more vulnerable is not the wisest thing to do.

    And when you say it's "likely" you will be able to afford the £100 per month increase that suggests that you are cutting it very fine here, and whilst it could work out, it could also go wrong if something unexpected happens that puts an extra strain on your finances. Which also suggests you may not have much in savings.

    So there are two possible difficulties - one after two years when your payments increase by £100 a month, and one when you retire.

    If I were in your shoes I would use the money that would be needed to pay the mortgage you're considering to either overpay the current mortgage, or save it, or a combination of both. Then have a re-think later.

    Have you started making a proper retirement plan, getting estimates on work/private pensions you have and thinking about how you want to live after you retire? if not, please do it. That might help you to make the right decisions now.
    • getmore4less
    • By getmore4less 22nd Oct 16, 4:49 PM
    • 29,762 Posts
    • 17,797 Thanks
    getmore4less
    • #6
    • 22nd Oct 16, 4:49 PM
    • #6
    • 22nd Oct 16, 4:49 PM
    what are the details of the deal

    amount borrowed
    rates both before and after the fixed period
    full term.
    Fees.
    • SavingSteve
    • By SavingSteve 22nd Oct 16, 6:12 PM
    • 482 Posts
    • 206 Thanks
    SavingSteve
    • #7
    • 22nd Oct 16, 6:12 PM
    • #7
    • 22nd Oct 16, 6:12 PM
    No broker can tell you what you will pay in two years time once your two year fix ends. It will be dependent on rates at that time, not the rates today (in the mortgage offer they will quote that it reverts to say the "standard variable rate" and tell you what that rate is today. That rate could be completely different in 2 years time.

    In terms of options if you can't pay closer to retirement what you may be thinking of is a lifetime mortgage. I know little about such products so will leave to you to research.
    • kingstreet
    • By kingstreet 22nd Oct 16, 6:41 PM
    • 31,914 Posts
    • 17,058 Thanks
    kingstreet
    • #8
    • 22nd Oct 16, 6:41 PM
    • #8
    • 22nd Oct 16, 6:41 PM
    the term would be 23 yrs taking me into mid 70s. Cant see me working until then but who knows
    Originally posted by donmel123
    So, ignoring all the rest, how will you meet the mortgage payments from the point you decide you can no longer work until the end of the term?

    As a regulated professional, if you can't answer this, neither I nor anyone else can recommend a term which extends beyond your state pension age, 66 or 67.

    All this flim-flam over a two year fixed term is a smokescreen. The elephant in the corner is how you afford it past retirement, as you don't appear able to afford it with a term which ends before retirement.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
    • JP1978
    • By JP1978 22nd Oct 16, 10:37 PM
    • 285 Posts
    • 220 Thanks
    JP1978
    • #9
    • 22nd Oct 16, 10:37 PM
    • #9
    • 22nd Oct 16, 10:37 PM
    It kinda scares me that we are moving home and getting a new mortgage that will take me to 65, let alone 70!

    Although, we do hope to overpay and get it down to maybe ending when im 60/61.
    • donmel123
    • By donmel123 23rd Oct 16, 12:08 AM
    • 5 Posts
    • 1 Thanks
    donmel123
    Thanks all for the responses
    King - Im not saying that I will decide not to work, Im looking at worst case scenario if I am not able to work. I am able to meet the mortgage payments now and if they increased in 2 yrs, was just concerned that with the term going past retirement age there was a higher possibility of something happening, workwise or healthwise. The incr after 2 years is unlikely as it would be reviewed again and this was only a quote. Obviously I will look at other things too, pension, retirement plan and save as much as I can to overpay and reduce the time,etc.
    I think I am just in panic mode as this is the first time I have sold and buying again, my mort now and next one would be just over 1/4 of my mthly wage, low compared to some of the FTB I hear getting mortgages today. I also have what i think is a fair amount of equity, so if needed to later I could sell and buy a retirement place poss outright. I dont want to move away from area yet as grandchildren just coming along and want to be there for them,
    • amateur house
    • By amateur house 23rd Oct 16, 12:33 AM
    • 226 Posts
    • 200 Thanks
    amateur house
    I am a similar age to you and am buying a house with a mortgage term that will end when I am 67. I don't think there is anything wrong with taking a mortgage that goes into retirement if you know you will have sufficient income. In my case though I expect my income to reduce significantly after retirement hence taking a shorter term. I also hope to overpay once my 5 year fixed rate ends, so ideally will have it paid off in 10 years.
    • yvonne alan joshua
    • By yvonne alan joshua 23rd Oct 16, 7:53 AM
    • 12 Posts
    • 3 Thanks
    yvonne alan joshua
    We have recently moved with work and ended up in the same situation, we needed to take a mortgage until my husband is seventy (He's five years old than me) so we could afford the repayments and get the house we wanted, but as long as you have a plan to clear before retirement I cant see the problem. Luckily for us we had endownment just mature so I have cleared three years already plus were planning on overpaying again each year when we get our xmas bonus and increase our monthly repayment when our son finished uni
    • kingstreet
    • By kingstreet 23rd Oct 16, 8:47 AM
    • 31,914 Posts
    • 17,058 Thanks
    kingstreet
    Im not saying that I will decide not to work, Im looking at worst case scenario if I am not able to work.
    Originally posted by donmel123
    So was I.

    You are saying you can afford the payments at the outset with a term which runs past retirement, or with a term which ends on or before retirement?

    The issues/questions are different in each case.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
    • donmel123
    • By donmel123 23rd Oct 16, 9:28 AM
    • 5 Posts
    • 1 Thanks
    donmel123
    Thanks Yvonne and amateur, Thats what I have been stressing about mainly, the fact It'd be over so long. I would definitely overpay to reduce the term. I have 9.5 years left on current and to match that term I would need to more than double the payments so thats a def no go. Am I right in believing that overpaying every month would be better than reducing the term and paying more in mortgage payments. I would guess the earlier in case of eventuality that you couldn't meet the higher payments. Ive calculated that o/paying between 100-150 a month could knock between 4-5yr off. Its stressful doing it alone and your the only one making the decisions and your not clued up. Wish Id moved years when the kids left home.
    • donmel123
    • By donmel123 23rd Oct 16, 10:06 AM
    • 5 Posts
    • 1 Thanks
    donmel123
    King -the feedback I have been getting on here have helped me understand my situation a lot more, and I realise there are things I need to put in place or do for when I retire to enable me to continue paying mortgage or whats left of it, should I wish to stay in the property. As also mentioned I may wish to sell and buy cheaper and smaller in a quieter area and pay outright with the equity. These are all things I need to consider and I will.
    • AnotherJoe
    • By AnotherJoe 23rd Oct 16, 5:12 PM
    • 7,226 Posts
    • 7,733 Thanks
    AnotherJoe
    Thanks Yvonne and amateur, Thats what I have been stressing about mainly, the fact It'd be over so long. I would definitely overpay to reduce the term. I have 9.5 years left on current and to match that term I would need to more than double the payments so thats a def no go. Am I right in believing that overpaying every month would be better than reducing the term and paying more in mortgage payments. I would guess the earlier in case of eventuality that you couldn't meet the higher payments. Ive calculated that o/paying between 100-150 a month could knock between 4-5yr off. Its stressful doing it alone and your the only one making the decisions and your not clued up. Wish Id moved years when the kids left home.
    Originally posted by donmel123
    The difference is, if you go go for a longer term and overpay, then you can stop the overpayments if you get into difficulties. If you agree upfront to the same higher payments as if you we overpaying, you have no flexibility.

    But it sounds as if in your case, you have limited flexibility to make overpayments anyway unkess you were exaggerating when you said you could just about make an extra £100.

    Bottom line, as you've now recognised, you need a plan as to cope with retiring, lowered income, and a mortgage.
    Last edited by AnotherJoe; 23-10-2016 at 5:21 PM.
    • Thrugelmir
    • By Thrugelmir 23rd Oct 16, 5:42 PM
    • 55,153 Posts
    • 48,344 Thanks
    Thrugelmir
    King -the feedback I have been getting on here have helped me understand my situation a lot more, and I realise there are things I need to put in place or do for when I retire to enable me to continue paying mortgage or whats left of it, should I wish to stay in the property. As also mentioned I may wish to sell and buy cheaper and smaller in a quieter area and pay outright with the equity. These are all things I need to consider and I will.
    Originally posted by donmel123
    Affordability is top of the lenders agenda. So source and nature of retirement income is key. In addition with interest rates unlikely to remain indefinitely low. No lender is going to risk the wrath of regulators by lending irresponsibly. What ever you may decide to do in the future doesn't figure in the decision process as of today.
    “ “Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria. The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell.” Sir John Marks Templeton
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