Getting a mortgage on a pension

Karen222

So I have 75 k savings and a low pension income supplemented by self employed earnings. I am  wondering if it would be possible to parlay that into buying a 95k flat. I'm 67  - am I dreaming? 

Karen222

I should add properties are available at this price in my area, with affordable service charges.

I may well be able to get a guarantor.

Most mortgage brokers don't seem interested in such a low loan amount - understandably as their % fees would be extremely low. 

born_again

Part of the issue is lenders do not like to go above 70 on mortgages as a rule. Some will.

What sort of amount are you looking to borrow?

grumpy_codger

born_again said:

Part of the issue is lenders do not like to go above 70 on mortgages as a rule. Some will.

...

Halifax/Lloyds were fine with 12 years for 61&67 (small LTV)

smallblueplanet

I'm also interested in mortgages for older buyers. I think posters on here have mentioned Barclays and Leeds Building Society maybe lending to 75? 

Karen222

Hi thanks - looking to borrow about £20k - never done this before so not much of a clue what is even thinkable

ACG

Maybe look for mortgage brokers who do RIO mortgages. Appreciate you might not want interest only, but those brokers will have experience in using retirement incomes and probably smaller mortgages. 

poseidon1

Karen222 said:

Hi thanks - looking to borrow about £20k - never done this before so not much of a clue what is even thinkable

I have mentioned this on other threads related to pensions at older age.

At age 66 Barclays lent me £55k on a repayment mortgage  to age 80 solely on the basis of the full state pension ( they disallowed all my other income sources since none were guranteed). They also gave me the option of extending the loan to age 83. So for Barclays at least age is not necessarily an issue.

However, I would be concerned about you ploughing all your savings into buying a home.

If £95k is the asking price I would be more comfortable with you trying to borrow (say £50k) and holding £25k in reserve for contingencies, furnishing the home, additional income and inevitable  future rises in service charges  (since you are considering a flat).

Why not have a go on Barclays mortgage calculator to get a sense of what they might be willing to lend.

Going through that detailed questionnaire, will give you a feel for what the actual affordability application process feels like.

https://www.barclays.co.uk/mortgages/mortgage-calculator/borrowing-calculator/

Once you get a sense of what they will lend, plug that number into some of their mortgage products ( 5 year fixed?) to get an idea of mortgage outgoings compared to rents ( if you are renting at present ).

Being in a position where mortgage is paid off by age 80 could be a satisfying and more secure postion to be in compared to being a renter at that age. Obviously, make sure the flat will also be suitable for you at that advanced age (ground floor etc).

Karen222

Thanks Poseidon I will have a look at Barclays, thank you for the link.  I am  not sure I will make it till 80 but the thought of doing so and having to find ++£20k is what has put me off a RIO mortgage. 

ACG

Karen222 said:

Thanks Poseidon I will have a look at Barclays, thank you for the link.  I am  not sure I will make it till 80 but the thought of doing so and having to find ++£20k is what has put me off a RIO mortgage. 

I dont do RIO mortgages myself, my colleague tends to pick them up so I am not the most knowledgeable when it comes to them. But, I do not think RIO mortgages have an end date. I think they need repaying if you leave your home to go into care (permanently) or you pass away - whichever happens soonest.