MORTGAGE PROBLEMS?

There are a number of property owners who find themselves unable to obtain a new mortgage – whether to move property or even to just obtain a better mortgage interest rate. Changes in the recent past have tightened lending criteria on income requirements and age restrictions. This has meant that in many cases borrowers have been left stuck with their lender’s standard variable rate when new fixed rates are 1% to 2% better. Just a 1% reduction on a £150,000 mortgage would save £1500 in interest each year (assuming a 20 year repayment mortgage).

Here are a few examples of this ‘mortgage prisoner’ problem along with possible solutions:

Problem

Some older people cannot get a new mortgage with a longer term, or extend the

term of their existing mortgage, because of the current attitude of most lenders to

maximum mortgage ages.

Solution

Try your present lender to see if they can help, or contact us. There are more

and more niche lenders who will take a more enlightened view about maximum

mortgage ages – where the deal makes sense otherwise.

Problem

Some people were able to take a mortgage out in the past where it was possible

to self-certify the level of their income. In virtually all cases now income must be

proven and the self-employed will be assessed on the net income as shown by

the Tax Office.

Solution

Some lenders are more generous in their income calculations than others and some

lenders require only one year’s completed accounts for the self-employed. For those

over 55 with relatively small mortgage needs, Lifetime Mortgages (Equity Release)

can often get over the problem of age or affordability. We can research what is

possible for you.

Problem

Some people took out interest-only mortgages. Usually they had a plan of how

to repay them, but sometimes that original plan is no longer possible.

Solution

For some simply down-sizing will be a solution. For others who want to stay where

they are, however, there may be other options. There are still some interest-only

mortgage options available if one is looking to extend the time he can continue to

stay in the property. It is also possible for those aged 55 and older to use a Lifetime

Mortgage solution. Contact us and we can work out what options are available for you.