Term Extension - Please help

farrahr

Hi,

Looking for some advice. My father is 60 & mum is 58 and currently have a santander interest only mortgage taken out in 2008.
mortgage was 165k against a 340k property.
The term was 10years. They are now looking to extended the term and change to repayment.
First question is how likely are they to agree to extend it by 20 years - personal circumstances haven't changed, father works full time around 26k and mum part time round 8k.
-we have a telephone interview booked for 2 weeks time and have completed a budget planner.
-credit files are good, no defualts or missed payments on anything.
Im just worried about they may think there age is a issue.

any advice, suggestions greatly appreciated.

TrickyDicky101

the affordability will be an issue too - how did they get such a big mortgage on such meagre earnings?

kingstreet

They are unlikely to accept a term to age 80. 75 is usual maximum, as long as there's evidence of affordability in retirement.

Over 14 years and those incomes, assuming no other credit costs, max affordability is about £140k and as retirement is going to take place during this time, it may well be less if the income will fall at some point.

dimbo61

Mum and Dad are going to struggle with that level of debt while working so how will they manage in retirement?
Time to look at over 50,s apartments
My Dad sold up his old expensive to run house and now rents a flat from a housing association.
Rent includes electric heating so he has money to enjoy life

farrahr

thanks, so age & affordability will be issues they will bring up.
Will they want to know about personal pension, my dad has one but my mum will only have the state pension to rely on.
they have savings of about 20k, will paying this in help the situation at all?

how long does it take to add another person to the mortgage take?
if I add myself.

Is 75 the max age for mortgage with the majority of lenders?

kingstreet

They will want everything.

Savings, income, pension data, outgoings, the lot.

Lending into retirement is a very sensitive area and in most cases, lenders will not lend past age 75, as I said.

A lower mortgage amount will aid affordability, of course. However, it may not be the silver bullet. This depends on the overall case data and the lender's attitude.

How long does it take to add another party? A couple of months, via a transfer of equity, but you would have to be able to afford the whole mortgage and your own costs to be able to do this.

farrahr

not looking good then.

I wouldn't be able to afford the whole mortgage myself.
something i will need to speak to my brother about, prehaps get him on board too.

On experience do you know what stance satander take on age?

kingstreet

It's a bit "cloudy", because it's an existing mortgage, not a new case, but criteria says;-

We do not lend above an applicant's intended retirement age and we will not accept any case where your clients’ selected or anticipated age of intended retirement is over 75 years.

We undertake regular checks to assess the plausibility of your clients’ selected or anticipated age of retirement on all applications and we may request further information or evidence to support this.