Can we remorgage in our 60's?

graysurfer

margaretclare wrote:

Not all retired people are poor and needy, some have quite a decent income, some are well-off in fact, it all depends. We've had loans in our 60s and we'd also have still been paying a mortgage until we were 83. We decided to do equity release 3 years ago because we could think of more pleasant ways of using £260 a month than on going on paying a mortgage and just having paid it off in time for someone else to inherit it. Freeing up this amount helped us with other things e.g. the roof replacement earlier this year.

Margaret

Thank you Margeret for your reply. I was interested in your comments about equity release, it is something we haven't considered. Has anybody any views on equity release? I would be interested to hear them. Are they a good thing or a bad thing? Regards Graysurfer

graysurfer

lisyloo wrote:

It's not necessarily the case.
If one of you dies, the other person could stay on in the house for another 20 or 30 years and they may not get their money for a long time.
It can be difficult to evict pensioners, so there is some risk from their point of view.
I'm not being negative just pointing out that there are risks that the bank need to consider.

Thank you for that, I understand all that, but our families don't live near us, so if anything happened I don't think either one of us would want to stay here.
Regards Graysurfer

jennifernil

We were with Halifax for 2 years before moving to Nationwide, they did not seem to have a problem with our age.
Even with a limit of 75, if you only wish to borrow £10000, and you are early 60s, paying it off over 10 years or so should be possible as you say you have a good pension. And once hubby is 65 he will get his state pension too.

margaretclare

graysurfer wrote:

Thank you Margeret for your reply. I was interested in your comments about equity release, it is something we haven't considered. Has anybody any views on equity release? I would be interested to hear them. Are they a good thing or a bad thing? Regards Graysurfer

Hi graysurfer

There are a lot of views for and against - do a search on Martin's site and you'll see what I mean.

You need to be clear about what you want to release the equity for. As I said, we did it to pay off an existing mortgage and free up the £260 a month for other purposes. Some people have equity but little cash and want to release as a regular income, not as a lump sum, and there are schemes now that allow you to do this.

It is NOT suitable for people who intend to leave their house as an inheritance to another generation because the interest rolls-up over time. We weren't worried about that because we didn't intend to leave it to anyone else. We were happy with the guarantees we had of 'no negative equity' and the guarantee that we can live here for as long as we want to. The property is sold and the 'lifetime mortgage' is repaid when the second survivor dies.

It's something that needs a lot of thought and consideration - as it says in the old Marriage Service, not to be undertaken lightly!!! Your house is probably your biggest asset so it does need careful thought.

Margaret

MortgageMamma

margaretclare wrote:

Not all retired people are poor and needy, some have quite a decent income, some are well-off in fact, it all depends. We've had loans in our 60s and we'd also have still been paying a mortgage until we were 83. We decided to do equity release 3 years ago because we could think of more pleasant ways of using £260 a month than on going on paying a mortgage and just having paid it off in time for someone else to inherit it. Freeing up this amount helped us with other things e.g. the roof replacement earlier this year.

Margaret

Margaret

I dont see anything in my post which would indicate that I think the gentleman is poor and needy, I am just stating a fact that lenders want to see proof that the borrower can repay the mortgage once they have retired. In my occupation it is considered unwise and unprofessional to make such assumptions, and as I see people from all walks of life daily, I am only too aware of how peoples circumstances vary.

margaretclare

MortgageMamma wrote:

I am just stating a fact that lenders want to see proof that the borrower can repay the mortgage once they have retired.

How does your professional approach differ then, towards someone who is still in the working world as against someone who has retired? The person with a retirement income may in fact be in a more secure financial position than someone much younger who may be in an occupation which is liable to redundancy? I thought I was in a 'secure occupation' - the NHS, but I was made redundant nevertheless. The retired person, by contrast with the younger person in the working world, may have less commitments - children grown and flown etc.

The beauty of retirement income is that it is not going to decrease or even to disappear except on death. This was far from being the case in our working lives, especially DH who was made redundant more than once.

Margaret

Ian_W

Mortgages are regulated products and for endowments, at least, one of the issues that constituted mis-selling was selling a policy that matured after retirement. Whilst it is true that your income may be more guaranteed after retirement, it's equally true that pensions generally mean a reduction in income over employed earnings, ie: half pay + lump sum if final salary is usually the max, with defined benefits schemes being more variable but never the less likely to be significantly less than earnings.

If lenders didn't make enquires how long would it be before some helpful son, daughter, nephew was on about how the wicked lenders had mis-sold a mortgage by preying on their vulnerable aged p's?

None of which is intended to signify that all, most, many state pensioners are in poverty, only that each case - employed, self-employed, retired has to be looked at individually by the lender.

BTW, for the OP - Coventry BS [a previous lender of mine] simply require that the mortgage term ends by age 85 see:
https://www.coventrybuildingsociety.co.uk/mortgages/LendingPolicy.aspx

MortgageMamma

Natwest go to 90. Margaret - my professional approach to a retired couple would be no different to that of a non retired couple - basicially because I am professionally obligated to assess all my clients income and affordability and make make recommendations with their best interests in mind. A lender will always assess income against borrowing and terms no matter who is borrowing. Everybody who lends money is a risk to a lender, and is at risk at some point of not being able to pay it, unless adequately and fully insured with good quality Permanent Health Insurance, Critical Illness, Life Assurance, Private Medical Cover etc. If anyone takes a mortgage or loan and does not take adequate payment/lifestyle protection when advised, and then has a change in circumstances and cannot pay it, then it is no-ones fault but their own. It is a fact of life that life, lifestyle and circumstances change and lenders and brokers alike are wise enough to identify that everyone has some level of risk - its minimising the risk that is important.

margaretclare

Ian_W wrote:

Mortgages are regulated products and for endowments, at least, one of the issues that constituted mis-selling was selling a policy that matured after retirement. Whilst it is true that your income may be more guaranteed after retirement, it's equally true that pensions generally mean a reduction in income over employed earnings, ie: half pay + lump sum if final salary is usually the max, with defined benefits schemes being more variable but never the less likely to be significantly less than earnings.

If lenders didn't make enquires how long would it be before some helpful son, daughter, nephew was on about how the wicked lenders had mis-sold a mortgage by preying on their vulnerable aged p's?

None of which is intended to signify that all, most, many state pensioners are in poverty, only that each case - employed, self-employed, retired has to be looked at individually by the lender.

I accept that lenders and potential lenders have to make suitable enquiries in ALL cases. However, your second point about mis-selling and accusations from some 'helpful' (i.e. interfering busybody) son or daughter about 'preying' on their aged parents - this is just as much of a stereotype as the idea that 'all' retired people are poor and needy. It says that so-called 'aged parents' are all incapable of making rational choices and decisions because we've all lost our marbles!

In our case, when we did equity release 3 years ago we were urged to inform our nearest and dearest. In fact, that was one of the boxes that the conveyancing solicitor had to tick to show that he'd discussed with us, along with 'do you know that your entitlement to means-tested benefits will be reduced?' We told the relevant people, my daughter and DH's son and daughter, and none of them was in the slightest bit interested. 'It's your money, do what you want with it' was the consensus. So I doubt whether any of them is going to cry 'mis-selling' at any point in the future.

For the OP, I've been thinking about this. £10K is a relatively small amount, and I wouldn't like to think of paying interest on this a long time into the future. Couldn't you just take on a normal loan to be repaid over - say - 5 years? As your house is paid for you're probably very credit-worthy by now and you should have no difficulty in getting a loan which you can pay off in a reasonable time.

We had one of those loans a few years ago when we had the kitchen done - it was at a low monthly repayment tailored for retired people, but instead of letting it run for 10 years we actually paid it off in under 4 years.

Margaret

graysurfer

Hi everybody, I would like to thank you all for some very useful infomation.
I have already started the ball rolling and have been offered one from the Abbey.
I am going to pursue others and see if I can get a better deal.
Thank you all again Kind Regards Graysurfer