Mortgage broker - ask me anything

K_S

@DE_612183 Quick comments -

- as I'm sure you're aware, the main issue is that you're within X years of 70, which is the criteria most lenders use to trigger assessment of pension income for affordability calcs. For example if you were <59, many lenders would simply use your current income. I'm not saying that no lender will consider as that will depend on the details.

- given that you aren't asking for additional borrowing or changing any terms of the mortgage, I would raise a complaint with your current lender if they are saying that you can't port. There is precedent to lenders allowing like for like ports where the applicant fails criteria.

- if there aren't any other options then you might need to consider out of the box solutions. For example one of my clients in a similar (but not same) situation as yours (remortgage in his 60s with a plan to downsize) ended up taking out an interest only remortgage with a lender that does affordability on the interest only payment and the repayment plan being downsizing). Just to be clear, I am NOT quoting this as a solution, merely an example.

- any decent broker should be able to suggest a couple of alternatives, it's only a matter of knowing what the issue is, lender criteria and speaking to a couple of lenders.

Good luck, hope it works out!

DE_612183 said:

New Request for Info / Help

Ok, so I have a situation which is probably not the norm, but not sure if / what help is available and where I can get it.

So the facts:

I currently have a £200k mortgage on a £450k property.

I'm on a tracker rate with 14 years to run ( taking me to 75 ).

I'm 61.

I'm looking to downsize and want to reduce my mortgage by about £70k - so the required mortgage is £135k

My current lender has looked at my income ( and because they assess my income when I'm retired ) will only lend me about £70k.

My income at the moment is fine £60k pa.

From 67 I'll have SP £10k, Pension1 10k, Pension2 £9k and about £90k in private pension as yet untouched.

Also when I get to 72 We'll have an additional £10k from my wifes SP.

She also has a pot of £60 which we could look to use.

I've explained all this and they did say they would look again at this - although as we are so far apart I'm not sure if I'll get any joy.

I feel I've got all the finance in place to safely manage the mortgage ( we're also planning to probably downsize again within a few years and be mortgage free ).

But we just can't get past the mainstream lending algorithm.

Are there any brokers / companies who would look at this?

I've looked at "lending into retirement" but these all seem to be about releasing equity on existing house rather than moving.

Thanks

DE_612183

K_S said:

@DE_612183 Quick comments -

- as I'm sure you're aware, the main issue is that you're within X years of 70, which is the criteria most lenders use to trigger assessment of pension income for affordability calcs. For example if you were <59, many lenders would simply use your current income. I'm not saying that no lender will consider as that will depend on the details.

- given that you aren't asking for additional borrowing or changing any terms of the mortgage, I would raise a complaint with your current lender if they are saying that you can't port. There is precedent to lenders allowing like for like ports where the applicant fails criteria.

- if there aren't any other options then you might need to consider out of the box solutions. For example one of my clients in a similar (but not same) situation as yours (remortgage in his 60s with a plan to downsize) ended up taking out an interest only remortgage with a lender that does affordability on the interest only payment and the repayment plan being downsizing). Just to be clear, I am NOT quoting this as a solution, merely an example.

- any decent broker should be able to suggest a couple of alternatives, it's only a matter of knowing what the issue is, lender criteria and speaking to a couple of lenders.

Good luck, hope it works out!

DE_612183 said:

New Request for Info / Help

Ok, so I have a situation which is probably not the norm, but not sure if / what help is available and where I can get it.

So the facts:

I currently have a £200k mortgage on a £450k property.

I'm on a tracker rate with 14 years to run ( taking me to 75 ).

I'm 61.

I'm looking to downsize and want to reduce my mortgage by about £70k - so the required mortgage is £135k

My current lender has looked at my income ( and because they assess my income when I'm retired ) will only lend me about £70k.

My income at the moment is fine £60k pa.

From 67 I'll have SP £10k, Pension1 10k, Pension2 £9k and about £90k in private pension as yet untouched.

Also when I get to 72 We'll have an additional £10k from my wifes SP.

She also has a pot of £60 which we could look to use.

I've explained all this and they did say they would look again at this - although as we are so far apart I'm not sure if I'll get any joy.

I feel I've got all the finance in place to safely manage the mortgage ( we're also planning to probably downsize again within a few years and be mortgage free ).

But we just can't get past the mainstream lending algorithm.

Are there any brokers / companies who would look at this?

I've looked at "lending into retirement" but these all seem to be about releasing equity on existing house rather than moving.

Thanks

Thank you - that's really helpful.

Car1980

Here's a question I've being musing:

The self employed generally don't get paid monthly, yet the world of bills works on a monthly cycle. Mortgage providers see the self employed as a higher risk, but are they looking at it wrongly? Why have no mortgage provider ever launched a self employed product that runs on a 3, or even 6 month payment cycle? A higher interest rate would no doubt be necessary, but this method would reduce the risk on both sides. The customer has less pressure and can build up and put aside the mortgage payments as they get paid, and the bank would have less chance of a defaulting customer and the extra interest rate could turn out to be more
profitable. If they can offer Islamic mortgages, it seems strange they don't offer more flexible products.

DE_612183

Car1980 said:

Here's a question I've being musing:

The self employed generally don't get paid monthly, yet the world of bills works on a monthly cycle. Mortgage providers see the self employed as a higher risk, but are they looking at it wrongly? Why have no mortgage provider ever launched a self employed product that runs on a 3, or even 6 month payment cycle? A higher interest rate would no doubt be necessary, but this method would reduce the risk on both sides. The customer has less pressure and can build up and put aside the mortgage payments as they get paid, and the bank would have less chance of a defaulting customer and the extra interest rate could turn out to be more
profitable. If they can offer Islamic mortgages, it seems strange they don't offer more flexible products.

Probably because they would expect the funds to be built up in advance rather than payment in arrears.

When I was SE I always ensured that I had at least 6 months worth of funds in an account for this occasion.