Many pensioners are finding more challenges in being offered mortgages once they reach retirement age. That said, there are retirement mortgage available that can still help homeowners release equity from their homes. The affordability for a retirement mortgage uses a calculation that includes investment and pension income. The mortgage can run for your lifetime or it can be defined for a certain number of years.
There are several different kinds of retirement mortgages. In general, this product is simply a loan that you secure against your property. It can be used before retirement or while you are in retirement. The duration of the mortgage can be for the rest of your lifetime or it can be for a fixed number of years.
As the homeowner, you need to make repayments on your loan, either of capital and/or interest. The terms of what you pay and how frequently will be outlined in your mortgage deed and will of course affect your ongoing and final balance. If you choose for your mortgage to last for the rest of your lifetime, it will not end until the home is eventually sold which typically happens when the final homeowner has either passed away or has moved into long term care.
You should be prepared to have your income verified when applying for a retirement mortgage. If you have not retired yet, you should expect to provide P60’s if employed. If self-employed, you may be asked for the last 3 years trading account, SA302’s, and pension forecasts.
Your decision of which retirement mortgage is right for you will essentially depend on your personal situation and how much equity you want to take out of your property. What you have available to you will be based on the youngest homeowner’s age and the value of the property.
We can help you make an educated decision on which retirement mortgage is best for you and your personal situation.