Getting a mortgage to buy a property becomes difficult as you are close to retirement. While there is no official maximum age when it comes to mortgages, some mortgage lenders impose their own maximum age limit. In most cases, the maximum age set by most mortgage lenders is between 65 to 80. As the borrower gets closer to retirement, he/she may have to pay higher interest rates and fees. This will make it more expensive to repay your loan. If you are planning to retire in a few years, then you should consider buying an annuity instead of taking out a home loan. Annuities allow you to invest money over a period of time. You can choose from different types of annuities like fixed annuities or variable annuities. A fixed annuity allows you to receive regular payments from the insurance company.


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Can I get a mortgage with my elderly parents?

Yes, you can apply for a mortgage if your parents are over the age of 60 and have been living in their current home for at least two years. You will need to provide proof that they live independently (such as an independent medical certificate) and show that you are responsible for them financially. If you are applying for a loan from a lender other than Halifax, you may be asked to submit additional documentation.


Can I get a Mortgage at 60?

Yes, it is possible to get a mortgage at the age of 60 but the mortgage repayment term must not be more than 10 years. You also have a better chance of being accepted if you have a strong credit history or else your income is high enough. The lender will usually ask for proof of income such as pay slips, bank statements etc.


Why is it harder to get a mortgage when you are older?

The main reason why getting a mortgage becomes difficult after the age of 60 is that people tend to take longer to save up for a down payment. Also, many financial institutions do not offer mortgages to those who are below the age of 55. Another reason is that offering a mortgage to an older person is riskier in terms of return on investment for the banks. But as a specialist mortgage broker, we can help you with mortgages in the older age as an investment property. We can find you the best deals available in the market so that you can benefit from lower interest rates and other benefits offered by the lenders.


How to get a mortgage if you are an older borrower?

If you are looking for a mortgage, you need to ensure that you have all the documents ready before applying. These include:

– Proof of Income – Your latest payslips showing your gross salary and net monthly income

– Proof of Assets – Bank Statements / Current Accounts showing how much money you have saved up

– Proof of Equity – Any equity you have in your current residence

– Proof of Creditworthiness – Any bad debts / CCJs / IVAs you might have

– Proof of Employment – Payrolls showing your employment status

– Proof of Age – Birth certificates, passports, driving licenses etc


Mortgage for Elderly Parents or an Adult Child with a Disability

There are many family opportunity mortgages for elderly parents or adult children with a disability in the UK. One such program is “Family Opportunity Mortgage” which helps an individual to buy a home for an elderly parent or a disabled child. It provides a subsidy of up to £20,000 towards the purchase price of a new house. There are certain conditions under which this scheme can be availed of. For example, the applicant needs to provide proof of relationship and they need to show that they live together. They also need to prove that they cannot afford to buy a house without government assistance. Under regular lending rules, these types of mortgages for houses that are not your primary residence demand higher interest rates with a high down payment. Such houses could also be used as an investment properties.  There are many lenders with different lending criteria such as mortgage payments, credit score etc. It is always worth having a credit card statement before applying for such mortgages. Bad credit scores could affect your mortgage application. But there are also some lenders that could accept your bad credit mortgage application. It is also important to note that some high street lenders may decline your application because of a bad credit score. A bad credit score could affect you with any kind of mortgage.

What is the difference between a Family Opportunity Mortgage and a Help to Buy Scheme?

A Family Opportunity Mortgage is a scheme where the Government subsidises the cost of purchasing a home for an eligible family member. Under the FOM, the Government contributes 20% of the purchase price of a newly built home. However, the Homebuyer Grant is only applicable to homes worth less than £600,000. The grant covers the remaining 80% of the purchase price. The amount of the grant depends upon the value of the property. Help to Buy scheme is another way to acquire a home. Here, the Government offers a loan of 5% of the property’s purchase price. This loan is repaid over a period of 25 years. The repayment starts once the buyer has paid off their existing mortgage.


Family Opportunity Mortgage:

The family opportunity mortgage allows people to buy properties for older people or adult children with disabilities with reduced costs. It is available through most lenders but it’s not always easy to qualify for one. The government has set out rules about who can borrow under this scheme. For example, only those aged 55 or over can take advantage of the scheme. Some individuals buy this property as an investment property because such houses are much value when compared to buying a second home or investment property. So, if you are looking for buying an investment property in addition to the property where you are currently living then contact a mortgage broker.

Read about help to buy on our other blog.


Who can avail of a Family Opportunity Mortgage?

Anyone who qualifies as an ‘eligible relative’ can apply for a Family Opportunity Mortgage. Eligible relatives include:-

1) A spouse or civil partner

2) An unmarried son or daughter aged 18 or above

3) A grandchild

4) An unmarried brother or sister

5) An unmarried niece or nephew

6) An unmarried aunt or uncle

7) A first cousin once removed

8) A stepson or stepdaughter

9) A grandparent


Advantages of the Family Opportunity Mortgage over assisted living or in-home care:

There are many merits of the Family Opportunity Mortgage versus assisted living or in-home care. One of the main advantages is that there is no monthly fee associated with the mortgage. This means that once you pay off the mortgage, you do not have any ongoing expenses. In comparison, if you choose assisted living or in-home care, you will still have to pay a monthly fee even after you have paid off the mortgage. Another benefit of the Family Opportunity Mortgage is that you don’t have to move into assisted living or in-care facilities. Instead, you can stay in your own home while receiving help from caregivers.


Disadvantages of the Family Opportunity Mortgages:

One disadvantage of the Family Opportunity Mortgage program is that it is offered by just some lenders. Other disadvantages include the fact that you cannot use the equity in your existing house to fund the purchase. Also, the amount of money that you receive from the government is limited.


Family Opportunity Mortgage lenders:

There are some mortgage lenders who can provide you with a family opportunity mortgage. The one limitation is that the process is more complicated as compare to regular loans.  Most lenders will not give you such a mortgage because not every lender underwrites loans “by the book” but overlay additional rules to Fannie Mae’s Guidelines. It is always better to contact a financial adviser like NeedingAdvice.co.uk Ltd before starting your mortgage application with a lender.


Buy-to-let Mortgage for Elderly Parents:

One of the best ways to utilise an investment property loan is investing in a buy-to-let mortgage for parents. When you invest in a buy-to-let mortgage, you get a lump sum upfront which you can use to buy a new property. Then, you can rent the property out to generate income. This is a good option especially if you want to make extra cash on the side and also save up for retirement.


Income Property Loan:

Another great option is to apply for an Income Property Loan. With this type of mortgage, you can borrow against the rental income generated from your property. You can either put down 5% of the total price or 10%. However, keep in mind that the interest rate will be higher than other types of mortgages.


How to find a family opportunity mortgage?

You can search online for family opportunity mortgages. There are several websites offering information about these mortgages. If you are interested in getting one, you should first check whether the lender offers them. You can also ask your bank manager or mortgage broker for details.

If you are looking for a family opportunity mortgage, you should consider using a mortgage broker. A mortgage broker will match you with a suitable lender based on your needs and requirements. They will look at all available options and then recommend the most appropriate one.


Next –  Mortgage for elderly parents

As we have discussed a couple of things about mortgages for elderly parents and suitable government schemes around it. There are chances that a mortgage lender won’t approve the application because of various affordability factors, so it is always better to take expert advice from a mortgage broker before starting the mortgage application.