Applying for mortgage

Hollyd

Hi everyone,

Just looking for a bit of advice on mortgages (although I am aware many things are uncertain in the current climate). We are aiming to be debt free and deposit saved in the next 6 years, however by this time, I will be 33 and my husband 46. Does anyone have any experience of getting a mortgage over the age of 45? Will it go against us that we will effectively have less time to pay off the mortgage, or will my younger age (ha!) go in our favour? Any advice appreciated, thanks!

kingstreet

The term of the mortgage may well be limited to the period your husband has until retirement, unless he can provide evidence of income in retirement.

This may have affordability issues, where you need a longer term to get the amount you want to borrow, but can't because retirement is in the way.

Play with a lender's affordability calculator, like this one, to see what I mean;-

http://www.halifax-intermediaries.co.uk/tools_and_calculators/mortgage_affordability_calculator/default.aspx

jamesd

It won't negatively affect you except by possibly limiting the term for which you can get a mortgage.

Some lenders won't lend into retirement. Sometimes their definition of "into retirement" isn't related to state pension age but is fixed at say 65. Other lenders will lend into retirement, with some going to at least age 85 if you can demonstrate sufficient income. You being younger may be sufficient for your income to be used to increase the available term, that'll depend on the policy of each lender.

Being debt free isn't necessarily required. It'll reduce the possible borrowing amount but still may be better than buying later. What does matter is having the borrowing at low cost, like 0% credit card deals that might have a cost of just a 3% fee every 12-18 months for balance transfers or nil for spending cards.

It's well worth considering buying a less than ideal place for a few years to cut living costs, if it would do that in the area where you live. Maybe one that needs some work so you can do it up and maybe make some money on the sale when you upgrade to a more desirable place. A cheap place with low income multiple makes it easy for a lender to lend even when you have other borrowing still around.

Also worth looking at the new government schemes that have been announced.