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Most lenders in the UK have imposed an age limit on their mortgages. This means that, for the 1.6 million pensioners in the UK, the problem is not repaying the monthly amount; it is finding someone that will lend to them in the first place. In addition, this means that those who already have a mortgage are ‘locked’ into the agreement as they cannot look to find a cheaper deal elsewhere.
A Worsening Issue
This is a problem that will not disappear anytime soon, especially as our population gets older. By the end of the end of this decade, the number of pensioners with mortgages is expected to rise to 2 million. As well as this, 600,000 interest-only mortgages are due to expire soon and the financial regulator believes that just short of half of the people who took these out will be unable to pay them in full when they expire.
The ‘Responsible Lending’ Debate
As a direct result, the debate about responsible lending has now begun. Banks argue that they have lowered their maximum lending age to 70 as part of a program of responsible lending. People of retirement age, however, say that responsible lending guidelines should hinge on the ability to repay the money instead; particularly in an age of increased life spans, longer working lives and higher state retirement ages.
In addition to this, there are a number of other reasons why pensions do not carry the lending risks that many banks claim. In the current economic climate, many consider a pensioner’s earning to be more secure than a newly employed twenty-something due to the risk of them losing their job. This is partly because pension income via an annuity is usually guaranteed for life, and final salary pensions increase alongside inflation.
Consult the Specialists
Despite this reluctance to lend from high street banks, there are still specialist companies who offer pensioner mortgages. As you would expect, pensioner mortgages are available to individuals who are either approaching or already in retirement. By tracking pension income alongside any other form of income, companies can decide whether someone is right for a particular product.
Pensioner mortgages can also be available to people who do not meet these requirements as some lenders allow people to use a family member or close friend to act as a guarantor. This service, however, is not available from every company. If you want to find a service that suits you then you should consider consulting a specialist. Capital Fortune Pensioner Mortgages are a great example of a firm who can scour lenders to help find you a good deal.
Track All Your Accounts With Personal Capital
Personal Capital lets you see all of your accounts in one convenient place. Sign up now for free.To conclude, as a pensioner it is getting harder and harder to get a mortgage and, even if you currently have a pensioner mortgage, you may not be getting the best deal. For this reason, you should consider consulting a specialist company to see if you really are getting the best deal on your mortgage.
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