Is it better to keep a mortgage?

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  • lisyloo
    lisyloo Posts: 29,615 Forumite
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    kingstreet wrote: »
    In future, if you need one, a remortgage of an unencumbered property can be done free.

    We can probably remortgage now for 15 year so until state pension age.

    If DH retires in 2 years time then I don’t believe we’ll be able to get a mortgage.
  • minimike2
    minimike2 Posts: 2,210 Forumite
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    Keeping a mortgage open just to have it reporting onto your credit report is really not worth it.
  • lisyloo
    lisyloo Posts: 29,615 Forumite
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    Thrugelmir wrote: »
    You won't be able to keep your existing low interest rate mortgage, If that's your hope.

    No I was not expecting to keep BOE + 0.49% :-)

    But I think I’ve established that new mortgage fees, survey and legal fees would be involved (and any others I might have forgotten).

    It’s probably not worth it for us (no forseeable need for credit), but I can see the potential benefit of a long term fully offset (zero interest) mortgage especially if (like us) you might be able to get line of credit until state pension age, but are cut off from that as soon as you retire. (My understanding is that working people can usually get a term until state pension age, but you can’t once retired even if your income is good and more guaranteed than income from work).
  • lisyloo
    lisyloo Posts: 29,615 Forumite
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    minimike2 wrote: »
    Keeping a mortgage open just to have it reporting onto your credit report is really not worth it.

    Ok. What 1) and 2).
  • minimike2
    minimike2 Posts: 2,210 Forumite
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    1) Again, the chances of it are so low that it is just pointless keeping a mortgage in place for that reason.

    2) If you look to extend the term of the mortgage it will be assessed just like a new mortgage would be. If the income will not sustain the mortgage for 15 years, the term extension will not be granted anyway.
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
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    lisyloo wrote: »
    (My understanding is that working people can usually get a term until state pension age, but you can’t once retired even if your income is good and more guaranteed than income from work).

    Affordability criteria would determine that you've already built up a sufficient pension entitlement now. Even with work there's no guarantee. If your occupation is that of a brick hod carrier , roofer, plasterer etc. Might be reservations as to your ability to maintain your occupation up until state retirement age. Whereas working in a call centre offers far less challenge.
  • lisyloo
    lisyloo Posts: 29,615 Forumite
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    edited 10 February 2018 at 8:18PM
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    minimike2 wrote: »
    1) Again, the chances of it are so low that it is just pointless keeping a mortgage in place for that reason.

    2) If you look to extend the term of the mortgage it will be assessed just like a new mortgage would be. If the income will not sustain the mortgage for 15 years, the term extension will not be granted anyway.

    1) thanks

    2) our office based work could easily sustain the mortgage for 15 years (especially as we can choose how much it will be). What happens if we get the mortgage on that basis (at say 52) but decide to retire at say 55 and not 67? My understanding is that you only get assessed once so nothing happens, is that correct?
    So could we get a mortgage until 67 (if we meet all criteria) and then later choose to retire at 55 but keep the mortgage? Yes or no?
    If yes then what I!!!8217;m saying is we can get a 15 year mortgage at 52, but can!!!8217;t if we try to get one if we retire at 55. Is that right?
  • davidmcn
    davidmcn Posts: 23,596 Forumite
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    lisyloo wrote: »
    1) having a charge on the property makes it much harder To carry out a fraudulent transaction than an unencumbered property
    But not impossible, and anyway the risk is almost zero, especially if you're living in the property (no chance of a tenant or squatter pretending to be a vendor).

    Assuming the property is in England & Wales you can sign up for the Land Registry service to notify you of any applications against the property. Not worth all the cost and hassle of a new mortgage.
  • lisyloo
    lisyloo Posts: 29,615 Forumite
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    Great thanks 1) and 3) ruled out. I suspect 2) is not worth it for us but I!!!8217;m still interested to know if I!!!8217;m right that you can keep a mortgage if you retire earlier than expected, but you can!!!8217;t get one once retired even though your income is more secure.
  • minimike2
    minimike2 Posts: 2,210 Forumite
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    You seem to be looking at this in the wrong way.

    The question you should be asking is "Do I need to borrow money on a mortgage"? That involves the need to use the funds.

    If the answer is no, then there is no reason to do so. Forget the rest of the theoretical paranoid stuff about fraud. And as for borrowing when retired, yes it can be done, but WHY do you want to be borrowing at that stage in your life when you have the house paid for.

    Do you actually NEED to borrow for something?
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