to get first mortgage after 40?

[ivebeencalledworse]

Mortgages are not something I know about. I am totally ignorant of them. I've lived without one my whole life. I came from a broken home with no guidance on how to be an adult. I left home at 18 and made my own way, which included debt, poor relationship choices, alcoholism, recklessness, and finally an abusive relationship and had to start all over again with a baby.

Don't get me wrong, I managed well enough, worked, remained functional.

But now at 40 my life is totally turned around because I married a wonderful, responsible, and loving man who adopted my child and we've been happy for five years.

He's younger than me and ambitious. He's supporting us while I use my income to pay off debts, which is going well. I aim to be debt free in the next few years.

I have a council home but my family want a better life so we are talking about a mortgage together.

I have a lot of research to do but when I say I'm ignorant I mean I'm starting from scratch.

Any glaring things I need to know would be gratefully received.

Am I "too old" or anything? Will my bad credit history (even if I am debt-free) be a real issue?

Also, I'm a freelancer with a variable and small income. I will not be going back into full-time employment. My maximum earning will be £1,000/month.

I genuinely never thought I would even be thinking about a mortgage but life has never stopped surprising me.

I appreciate input.

It’s great he is doing his accountancy training - and I know it’s tough to do later in life.

By starry eyed I simply meant that assuming he has this huge earning potential can lead to disappointment. I manage a number of accountants and they earn between £40k to £60k (with ten years plus experience). Which is a good salary but obviously well below what you and your husband are aiming for.

yes I know a few who have reached the six figure salary level but it took years and years post qualification.

I am waiting for completion on my first ever house at the age of 44 (hopefully the first week of September!) and I could have written your post almost word for word.

I earn more than you now but DH earns less than your DH, for various boring reasons the mortgage is solely in my name which is both thrilling and terrifying in equal measure 😆

My advice would be to use a broker. Ask for recommendations and be brutally honest about your situation. Mine has been an absolute life saver and should really receive a damehood, if not canonisation for the help, advice and support she has given me. I suspect she will be as thrilled as me when the house completes, just because she won't have to deal with my questions again!

I would also recommend that you do not make payments with rudely inappropriate references on them. They're not nearly so amusing when you have to explain to proper grown ups what they were actually for 😉

It would be cheap yes, and it could well make a profit. But I just thought that signing up for a 25 year mortgage then selling up in five years would not see us receive the price of the house back, but a reduced amount

If you sell after 5 years, you'll have the sale price minus the outstanding mortgage (plus fees like stamp duty, solicitors fees) available to put towards your next property.

Eg if the current value is £200k and you can buy for £150k with a £20k deposit and you look to sell in five years' time and the value then is £220k and you've paid off £10k from the mortgage, you'll have £100k (minus costs to buy and sell) to put towards your next property.

However, if prices fall and the house is only worth £180k in five years' time, you'll only have £60k minus costs, to put towards your next property. But if that happens, it could well be that a larger property has fallen by a bigger amount of money so the cost to move might not be affected.

Right to buy usually comes with restrictions like you're not allowed to sell for 3 years or if you do, you have to repay the discount, so you need to understand what these are. How realistic your chances of buying are also dependant on where you are in the country. In many places, you'll be fine, especially if you can get a boost due to the discount on your first property. But maybe not in London/SE where prices are much higher.

Its also worth considering the effects of a recession on house prices. It could well be that we're about to face a stagnation or even fall in property prices due to increasing interest rates and rising energy prices etc so you don't need to worry about rushing to buy because, as long as prices don't keep increasing, you can just buy later.

Your age need not be a barrier either, especially as your DH is the higher earner and is younger than you. If you have a decent pension, this can be used to repay the mortgage.

For now, concentrate on paying off debt, improving your credit file and building savings, all of which will put you in a good position to buy when the time is right for you.

Also worth having a look at how much a mortgage is likely to cost, compared with renting. Depending on your rent and likely purchase price, one or other could be cheaper, but look at the impact of increasing interest rates.

Lots of information to read up on here:

www.moneysavingexpert.com/first-time-mortgage/

You also don't have to take a 25 year mortgage, it can be shorter if your age dictates this and you can afford to do so.

You’d be crazy not to take advantage of right to buy - even if it means thst you stay a little while longer thank you want to in the house before you sell it.

good luck!

We got our first mortgage when I was 50 and DH 48.

Repayable over 15 years though, not the normal 25 (actually paid off now after 9 years).

I don't agree with right to buy at all so not in favour of that. We have enough people waiting for council houses, we don't need more selling off and the big reason we are in a state with council housing is that ridiculous scheme. Buy it if you want, but know that you're taking a house from someone who does need it. I couldn't live with that.

Otherwise you might as well buy a property together, he will have a claim on it anyway if you divorce so might as well use his income to get a bigger house. You'd get max £208,000 if you're lucky for a mortgage and you will need 5% deposit if neither of you have owned before, I didn't see if he has.

I would focus on paying off your debt and saving, and researching your area.

@ILikeHotWaterBottles i actually also don’t agree with right to buy. But it’s there and OP sounds like she’s had a hard life and it is the current system - there are far far FAR worse people benefiting from the current inequalities inb
housing than the OP. I don’t think it’s fair to impose that guilt on her in this case.

With right to buy they will usually take your discount instead of a cash deposit so would mean you are able to buy sooner rather than saving a deposit. The house price whilst you are saving will probably rise meaning you will have a higher mortgage. The difference from when we bought our house six years ago to now is huge, we wouldn’t have been able to buy this house with the current price.

There is usually a restriction on the first five years of right to buy and you have to pay back a proportion of the discount if you sell before then. If you bought sooner rather than later you will simply replace five years of saving a deposit with starting to repay the mortgage. By the time you sell you would have only a small amount of discount or none to repay and hopefully the house would have increased in value enough to provide a deposit for the new mortgage on your next home.

Haha, congratulations! It IS terrifying! It's a lot of responsibility. Feel like I'm having a personality transplant but I guess it's never too late to grow up.

We will likely use a broker, but I'll want to go into it knowing what I'm doing too.

Well done Op for managing to turn yourself around from such a shit start in life. It’s not easy at all.

Your sent history Will count of course, they assess people on risk.

However your income will count also and £1k pcm may not It be enough. This will depend on your partners ability to earn, other debts you may have, how much you’re borrowing and over how long.

Good luck - I wish you well.

It is the current system and nothing at all legally wrong with it. Morally though, very different story. I'm saying I couldn't do it and op needs to understand what she is taking from someone else. Hiding that fact, pretending its not there, is how we've got into the mess we are in.

I simply don't understand right to buy! I think council housing is brilliant but I don't understand why they would then let people buy the stock. My plan was always to live here with my daughter and then die and someone else can have it, presuming my child had begun her own life.

It makes no sense to let people buy them and I don't understand the rationale. But given it's a thing, even if it shouldn't be, I can't say I would not use it on principle. I was brought up a raging socialist and honestly today I'm less so.

But in principle I don't disagree with you. Having said that, they are actually building NEW council homes in my city! Which is great.

the only issue with mortgaegs and age is that you have to have them paid off before your planned retirement age. We'll be in our 60s as will a lot of people when they pay off their mortgage.

Thank you. It was a bad start but all the poor decisions were mine. I don't tell my story for sympathy, just to explain my lack of "grown up" insights, because I always aimed for a council home, and never idolised owning, maybe because it's not something my family did, it seemed unattainable anyway, and I had my secure tenancy which I was happy to live in and pass back.

The reason I earn so little is I'm not actually badly paid but I do the work that I can manage at the moment because when I've pushed myself in the past it's led to a really bad time and I have trouble with pressure at work. I love what I do now and am actually earning increasing amounts for less work which means I can push to grand a month and still be know that I'm around and free to take care of kid and house stuff, which I enjoy.

So is it really silly to expect a joint mortgage if he earns a good wage but I'm only on meagre wages? Is this not something couples often do? I'm predominantly playing a hosuewife role in my marriage, as agreed, and like this way of life much better than striving for a career, it's just not me, although I did try.

I know, and we actually don't want to be tied here any longer than necessary so I think we will skip buying this place for all the reasons above. I hope the next person enjoys this home and is as elated as I was when I was shown it. I cried.

In your shoes I would definitely buy the council house. Absolute no brainer. Surely as an accountant your DH must be clued up on this?! I can understand you being naive OP but am puzzled about your DH.

This sounds like a viable plan for us, thank you and well done to you.

He's young and is training, not qualified. The books are huge and having worked in financial admin roles myself I know how intricate it can be. He also works another job and is doing a degree so give him time 😂

You both will need financial advice

As quite frankly it seems like a poor deal for him. I wouldn't be surprised if he wanted a deed of trust to protect the money he puts into the house buying process. As it won't be you helping to pull the deposit together.

Your poor credit score would be an issue, as would your variable income and low income to boot.

How old is your child? As they will also count against you as a dependent when looking at affordability.

I know you say he has 'big' career goals but are they achievable, the average accountants salary in the UK is £38-£42k a year

Which isn't a lot, especially considering your low salary.

Mortgage lenders typically do 4-4.5x combined salary for affordability. Which means even at the top end, combined with your salary they'd only lend you £216,000 which isn't much to get a house in most of this country.

That's good that they are building more where you are. They finally built some more here (some being the word, I doubt it's more than 5), but at least it got my partners friend into a house finally, after waiting 20 years.

I see, thank you. Yes it's important to be realistic and keep reassessing.

With your circumstances - freelance income, over 40 so standard 25y terms may not be appropriate - I would highly recommend that you use the services of an independent independent Mortgage Advisor, rather than simply going to your bank or (worse) to the estate agency for mortgage advice. It may cost a little in fees but they will have access to a much wider market and can recommend a product to suit your personal situation. We ended up with a single-name, 23 year term mortgage for this house (bought in my mid-40s) so that it finishes at retirement age; and we are over-paying to be mortgage-free sooner.

Have a look at how much the houses on your estate are selling for - some will be privately owned. This will give you an idea of the value of yours on the open market. Then find out what discount you'd get (depends how long you've lived there) and whether there are any restrictions eg you have to stay for x years ...
You get a 35% discount if you've been a public sector tenant for between 3 and 5 years. After 5 years, the discount goes up 1% for every extra year you've been a public sector tenant, up to a maximum of 70% or £87,200 across England.

So as you can see having lived in social housing a min of 3 years instantly you get 35% discount should you opt to buy - and that's going to be absolutely valuable when you move on to your next house.

So with the credit score, if my debts get paid off and it goes up, does that eradicate the 'with your poor credit score' thing, or is there some kind of historical record they use?