Over 50s Mortgage
When it comes to securing funding for a home as you age, your over 50s mortgage options start to dwindle, and while this can make it more difficult, it is most certainly not impossible to get an affordable loan.
Since banks are going to protect their interests, however, it is up to you to protect yours, and that means getting to know everything there is to know about your mortgage options after 50.
An Older Generation
In the past, most people would start thinking of retirement around 50, but people are living longer, and this means that they are working well into old age. 50 is officially the new 40, and while over 50s mortgage options are more difficult to get hold of, many institutions are now specializing in providing funding to those thinking about purchasing their homes at this age.
A Commitment You Can Afford
One of the most important things that any bank will want to know is whether you can afford your monthly over 50s mortgage repayments, so expect them to dig deep into your financial history. If you plan on working for the next twenty years, you need to prove your income will cover your payments.
If you plan to retire, things can get a bit more complicated. Retirees need to ensure that they can prove they’ll be able to pay their mortgage even after they stop receiving a monthly income from their full time jobs.
Over 50’s might have other income sources, such as investments or pensions, and these will often be enough to cover the overall costs of the loan.
Pay It Off Sooner
Because most lenders require that their clients pay off their mortgages before a certain age, such as 70, it is important that over 50s mortgage borrowers consider whether they will need to pay off their loans in a shorter space of time.
Usually, this requires that the lender increase the monthly payments, and while this results in the client having to pay more each month, it could also decrease the overall interest, resulting in a lower overall mortgage.
Asking The Right Questions
Before picking one of the many over 50s mortgage options available, it is important that clients take the time to locate the right product on the market, and this involves asking the right questions.
Questions such as “should I opt for a fixed or variable interest rate” and “how much of a deposit can I afford to put down” will not only affect the sort which lender you will be able to approach, but they will also influence how much you end up repaying the institution.
The Disadvantages of Borrowing After 50
Being made aware of the disadvantages of borrowing after 50 is just as important as understanding the benefits. Some borrowers have strict age limits for granting loans, and the cut-off is usually at about 65. Secondly, you might find that the institutions expect you to pay a higher interest rate.
Knowing everything there is to know about mortgages over 50 will help you make the right decision about your new home – one that you will be happy with for many years to come.