Age questions

bluebuzzard

So the good news is my wife's parents have given us a significant amount of money to put towards a deposit for a house. We started talking about what we could possibly afford and some quick checks using online tools gave us some base line figures to work with. We know it'll be right on the very bottom end of the market but we have time and can wait for the right house to come along.

What I didn't factor in was my age (very soon to be 49) and as I'm the only one working currently the mortgage will be based on my salary and details. I'm pretty sure that applying for a mortgage that doesn't complete until after retirement age is going to cause problems so what options do I have? Can we have the mortgage over a shorter term that finishes by retirement age (assuming the lender believes we can afford it) or are there other options?

My wife is hoping to do a PGCE and go into teaching full time within the next 12/18 months. Which means at that point we'd have two salaries coming in but I know lenders don't work on what ifs but we would be working towards that goal.

I've done my credit check through MSE (thanks) and it's a perfect score, we have no outstanding loans or credit cards to pay off and we do have a little bit of savings stashed away, and I do mean little.

Any advice would be useful at this early stage.

Thanks

Nebulous2

If you’re trying to do something out of the ordinary it helps to get professional advice. Consult a broker.

Some lenders will offer loans beyond retirement age. I got one from Nationwide 18 months ago. At that point they were prepared to go to 75, though that may now have been extended. You need to be clear with them that either you are not going to retire at normal retirement age or you will have sufficient income in retirement to keep paying it.

ACG

Affordability and the mortgage term will be based on your retirement age.

The PGCE wont make any odds unless it takes you 12-18 months to find somewhere or she starts it sooner.

Nebulous, Nationwide have not gone beyond retirement age, it sounds like you have told them you wont be retiring until age 75. I suppose the alternative is that you are close to retirement and you have provable income post retirement?

kangoora

Provided your wife takes the right track for the PGCE you can get a bursary of up to £20k tax free! over 10 months in training. My son is halfway through the PGCE, although it is Maths which is in demand and amounts vary by subject. The government has committed to raising starting teachers salaries to £30k! by 2022 recently.

I, personally, see nothing wrong with electing to inform lenders you are prepared to work to 75 and then review it in a few years time when you have two incomes and possibly remortgage?

The downside is, if your wife doesn't pass or drops out after a few years, you may end up working to 75 - or need an alternate solution. The drop-out rate for teachers is rather high (hence the pay boosts incoming), something to be aware of.

Another option, you say you are soon 49. Can you qualify for a shorter mortgage, say 21 years which only takes you to 70 (or shorter to 67/68 retirement age) and may be easier to get? Payments would be higher though

Nebulous2

ACG wrote: »

Nebulous, Nationwide have not gone beyond retirement age, it sounds like you have told them you wont be retiring until age 75. I suppose the alternative is that you are close to retirement and you have provable income post retirement?

Everybody’s situation will be different. I was taking a mortgage on a mortgage-free house with a relatively low LTV to buy a holiday / retirement home. I wasn’t clear about retirement age and said so, though since I bought it I’ve been inclined to make it sooner rather than later. They asked for my pension statement. I also told them I planned to sell the main home and move to the retirement home on retiring, so they knew I had an exit strategy which left me with a roof over my head.

They were more interested in the holiday house than anything else. They specified I couldn’t let it, for holiday lets or long term. I don’t intend to, but don’t see how they could police that, given it is mortgage-free.