mortgage app and pension

witchy1066

can someone please explain to me why it is when applying for a mortgage we have been told they can not take my pension into consideration, it seems strange to me that they will take certain benefits into account but not a pension , benefits can change as circumstances change, my pension will always be my pension

would appreciate any advice on this

I will be 62 in September if that has any bearing
the mortgage will be for a 15 year term (partner is 50)

Regards
J
xxx

kingstreet

... and "they" would be?

Will they lend until 77?

witchy1066

sorry not to be more precise , 3 mortgage brokers we have spoken to ,

why would they not lend up to 77 ?

kingstreet

Typically, lenders set their maximum expiry ages at 75, although there's the odd one or two who will do longer. It's all about affordability and what is reasonable, although a lot of opinion goes into such issues.

Lenders are paranoid about getting an "irresponsible lender" tag from the FSA/FCA, so they are now very careful about lending into retirement and on interest-only.

Here's what Halifax, for example, has to say;-

Retirement - Primary Income 100% - Private/company pension, one of the following;-

Latest payslip.
Latest bank statement.
Latest pension statement/reference dated within last 12 months.
P60

For State Pension: 1 full month bank statement to show source of income.

and

Lending into retirement

The maximum age at the end of the mortgage term is 75 years for all lending.

Future retirement income will need to be verified where the client is within 5 years of their planned retirement or their 65th birthday, whichever is the earliest, and the term exceeds retirement. Affordability will only be assessed on retirement income above the age of 70.

For State Pension;

Latest 1 month bank statement.

For Company or Private Pension:

One of the following

Latest payslip.
Latest bank statement.
Latest pension statement/reference dated within last 12 months.

witchy1066

that's interesting, isn't it about time someone told the lending establishments that the retirement age for a man of 50 is now 67 and not 65,

we have applied for a joint mortgage, my partners income only will be taken into consideration, like I said in my original post it doesn't seem right that my pension can not also be considered,

we have been told that we could get mortgage up to my partner being 75 , he has a good MOD pension but we are happy with the 15 years, so wouldn't want to go for more years but we wanted to borrow a few thousand more than his wage alone will allow and thought my pension would be considered

holly_hobby

So its not really the income, is the term that is the issue (which is always based on the oldest applicant).

If affordable, why not just reduce the reqd term to 13 yrs ?

Or consider approaching other lenders whom don't have a 75 upper age ceiling.

Hope this helps

Holly

witchy1066

yes its the income, we can only borrow £75000 on my partners earnings and we really wanted around £78000


ah yes I see what you are saying Holly, good idea
will put that to our broker tomorrow

Thank You

J
xxx

kingstreet

witchy1066 wrote: »

thought my pension would be considered

Which my link to Halifax evidences that it would, by them. 100% verifiable with a payslip or bank statement.

Are your advisers independent, or at least whole market?

holly_hobby

witchy1066 wrote: »

yes its the income, we can only borrow £75000 on my partners earnings and we really wanted around £78000

Sorry, you mis-understand, what I meant is that you apply under a joint mortgage (adding your income to your partners), but reduce the reqd term from 15 yrs to 13 yrs, so that the income requirements are met, and the mge term falls within your 75th bday (and Halifax's/most lenders max redemption age) - and eveyones happy.

As Kings has stated, that is assuming your pension income may be verified by the lender ?

Hope this helps

HOlly

witchy1066

yes we have independent broker
and I am surprised she didn't think of Holly's suggestion but then again neither did I and I am a retired accountant LOL
its easy to miss what is looking you in the face

Thanks both, will post outcome

J
xxx

kingstreet

So, which lender are you using and why?