Age related Mortgage criteria help please

gmordente

Im 51 years old and single. Self employed. I have a mortgage at the moment, but I was wanting to buy a larger home. Ive been told I cant get a larger mortgage due to what my accounts say, and was wondering if theres ANY way around this at all.
My father is retired and solvent, but he is over 70 and considered too old to be a guarantor for me.
Is my father at 76 too old to apply for a mortgage for me? He can afford to buy a house outright for me, but I'm not comfortable at all with this.
Please advise me if I have any alternatives. I had a self cert mortgage in the past but they are no longer available

ACG

The general rule is that you cant have it both ways - if you want to borrow money, you have to pay tax to evidence you can afford the borrowing.

If the profit is retained in the business then there could be a way around it but with limited info thats difficult to say.

kingstreet

What's your net profit for the last three years?

Worst case scenario, you'll probably be able to borrow upto 4ish x the average, with an 18 year term, unless able to evidence income after retirement, using age 70.

Some lenders will use the latest year's net profit, without averaging, if your income is increasing steadily each year.

You also need to deduct the cost of dependents and credit commitments.

Have a play with different lenders' online affordability calculators to see what you can achieve.

A mortgage with a 76 year old is likely to be impossible.

holly_hobby

With regards your accounts, are you a limited company and its just your drawings (ie salary and dividends that you are taking, that are too low), or have you actually been assessed on net income, which is too low ?

If its low drawings (to minmise tax), then there are lenders that will work on your (share) of net profit.

If your actual income full stop is too low, then although Dad may be happy to assist you purchasing, how will you actually maintain the mortgage ? And given that Dad would be legally responsible for the mortgage with you, he will be affected by any default, and pursued for payment.

There are a couple of lenders whom don't have the upper max redemption age of 75 yrs, but of course affordability must be demonstrated througout the mortgage term - which you may or may not be able to satisfy.

If Dad as you say has the capital to pch for cash, why not do that, on a private (documented) loan arrangment - if Dad is worried about repayment he could always put a charge on your property for releasement when you have repaid him back - any interest must be declard by him to HMRC for tax.

If you want to pursue a jnt mortgage with Dad, given the age and max term issues, you will need an experienced mortgage broker to assist.

If you are going down the private loan route, your solicitor will assist with drawing up documents, essential if Dads net estate is likely to exceed available IHT nil rate exemptions on death occuring within 7 yrs of the purchase.

With wills updated accordingly, and how this will be managed within Dads estate upon his death , and what will happen if you pre-decease him (inc any life cover that may be a sensible consideration), etc.

Hope this helps

Holly x

Let_Us_See

Unless your accountant is also a qualified mortgage adviser then his belief you are not eligible for a mortgage must be down to lack of income? If this is the case, then basically you are stuffed for a mortgage in your name.

Although Holly comments "If you want to pursue a jnt mortgage with Dad, given the age and max term issues, you will need an experienced mortgage broker to assist." Preferably, one also able to walk on water.

However, I do agree with Holly that you should talk to your father.

holly_hobby

Let_Us_See wrote: »

Although Holly comments "If you want to pursue a jnt mortgage with Dad, given the age and max term issues, you will need an experienced mortgage broker to assist." Preferably, one also able to walk on water.

Oh you kill joy ....

But based on OPs comments that Dad has the supporting income, they do however need one whom is experienced/familiar with the wider mortgage market, and those lenders (of which there a currently a couple), that don't have an age restricted term, however they do exist .

Of course, the rest of the case would need to satisfy criteria requirements - but holding a jnt mge with Dad based on age alone, isn't a complete no-no from the off - but it may take some legwork - and not my preferred route as discussed.

Hope this helps

Holly

Let_Us_See

Agreed, not a complete no-no.

However, whilst you father may have the assets to purchase a home outright for you, he will still need to have a guaranteed income in retirement to meet lenders' affordability criteria for any joint mortgage.

There are a couple of lenders and scenarios that could be considered but far too involved to attempt to explain on a forum.

gmordente

Thank you everyone.