If you’re recently separated, we understand you’re likely to be experiencing a host of emotions. One thing that often causes stress is worry over living arrangements. It’s a good idea to address this as early as possible, so you know where you stand.
There are several possible outcomes after separation, especially if children are involved. These can include transferring the property to one of you, perhaps with a lesser share of other possessions; retaining joint ownership but giving one party the right to stay in the home; or selling the home and splitting the proceeds in a proportion deemed fair, so you can both start afresh.
If you’ve opted for the latter and wish to apply for a new mortgage, consulting a mortgage broker is highly recommended, as getting an application accepted can be trickier as an older borrower.
There’s no maximum age for applying for a mortgage. However, most lenders set their own limit: 65 to 70 for taking out a mortgage; and 70 to 85 for paying it off. That means if you were 55 and wanted a mortgage, you might have to pay it off within 15 years, depending on the lender’s terms.
If you are in your forties, you will likely still have plenty of choice when it comes to mortgage products, and be able to apply for the standard 25-year term. However, once you are over 50, your mortgage options may change. But that doesn’t mean you don’t have any options available to you and a reputable mortgage broker will be able to help you explore many options. ‘There are some good mortgage products available from lenders for those trying to obtain a mortgage in later life, but it’s crucial to see a broker quickly to establish where you are financially at the moment, rather than just going to your existing bank and trying to do all of the legwork yourself,’ says MBA’s Managing Director, Monica Bradley.
Here are some factors to consider, to ensure your new mortgage application has the best chance of being accepted:
• Consult a mortgage broker. A qualified and experienced broker will assess your finances and find a deal perfectly tailored to your situation. They may also have access to deals you don’t know about.
• Check lenders’ age limits, for when the mortgage term both starts and ends.
• Plan how you will repay the mortgage if you retire before it ends. How big is your current pension pot value? Will you still have an income via property, shares or investments?
• Understand that you will have access to more mortgage products and a better chance of being accepted if you have a strong credit history, a good deposit and a high enough income to cover repayments.
Remember, the more information you obtain and the more advice you get, the better placed you will be to fully understand what options are available to you, which in turn, will help you plan for a brighter future.