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.

Because a mortgage is a liability to a bank and you don't own the home until you have paid it off or have most of the equity.

Lol. So you do understand what a mortgage is then. What a waste of everyone's time.

So if I was in your position this is what I’d do:

buy the council house in your name (joint mortgage and he could have a legal doc called a deed of trust to own half). Ask your mortgage adviser if this is even possible in your current situation. It could well be. You may have debt but if you are repaying it then that is recognised as good. Sign up to a credit scoring platform like ClearScore who will give you tips on best things to do and what you can do to consolidate debt to reduce interest. The mortgage is called a sole proprietor joint mortgage- essentially he is a guarantor for the loan based on his income. But the legal paper work makes it jointly his despite not logged at land registry as such. This means he can continue saving…

over the next 5 years he can build up his savings - switch his help to buy to a lifetime ISA and invest it eg with Nutmeg, or Moneybox etc so that it grows faster than a standard interest rate. This means he can save more money per year than H2B.

then in 5 years time (post restriction on reselling) you will have some decent equity in your council right to buy (from discount plus whatever you have repaid). If he pays the £4K max a year into a LISA that will now be £25k (£5k government bonus) plus growth so could be over £30/35k. Because he isn’t a name on the land registry on your house now he would then be legally buying his first home and can use the LISA. You can’t start a LISA as you’re over 40.

This will mean you have a much bigger deposit for your next house, meaning either a bigger/nicer house/area or a smaller loan-to-value mortgage saving you literally tens of thousands of pounds in future mortgage interest repayments.

over the 5 years you can also improve your credit score and can record your earnings on self assessments and have better chances of securing a better joint mortgage value - as well as his earnings improving I would assume. So instead of say getting a 95% mortgage quickly with a £10k deposit on £200k house you could have £50k in equity on your RTB (as you will have paid down mortgage as well as discount) and £35k in savings.

Let’s say you use £70k (to keep some back for stamp duty or home improvements) then that is a 20% deposit on a £350k house and the chances of you getting a £280k mortgage higher if your joint income is £60k+ you may get over £300k even. a mortgage with a 20% deposit is considerably cheaper than a 5% deposit. Just look at some online mortgage rate comparisons. This saves you so much money long term.

It doesn’t matter you are over 40 so long as you say you will retire at 70, that could be a 20-25 year mortgage. It will always be based on older person in a joint mortgage application.

myself and my OH only bought our property when he was 46 so will be paying until he is 70 but I am the higher earner and 10 years younger so done when I’m 60.

yes you will stay where you are for 5 years but if it’s nice enough what’s the point in not taking advantage of your RTB? It’s all about the long term gain over short term “pain”, although I personally wouldn’t call it pain.

Yes, we don't have a joint account, that's not something I want. I also declined a joint account for daily spends from him in favour of using my own earnings. I don't want his handouts.

He does want me to not have to work, as he said, but has never tried to prevent me working.

I think there's a bit of hyperbole going on about him, no one's perfect and he could be a bit optimistic but no, I don't believe he's an abuser or trying to fleece me, at all.

Having said that, and he is aware of this, I am reluctant to give up what I have and come along for his ride. And this is the impasse we find ourselves at and my first step during a busy work period was to come here and get some input.

You will find out all the details once you start applying for mortgages. However, in my recent experience mortgage lenders strongly prefer having both resident adult names on the mortgage. Otherwise they are concerned about the non-named person asserting their rights to stay in the case of default and repossession. I recently remortgaged our house and it would have been easier in terms of paperwork just to leave him off (especially as he was nearly 60) and my income alone was ample. However they did not want to do that for the reasons above. But adding another person to the mortgage will not make reduce the amount you can borrow. The other person could have zero income and it would still be fine if the first person earns enough.

Thank you so much for taking the time to write all that.

You can’t “just go on the deeds” if you’re not on the mortgage. It doesn’t work that way. I used to work in conveyancing.

You will find a lender who will be willing to lend even with debt or a history of debt. My brother had £25,000 of debt and still got a mortgage recently. He even had an IVA.

And good for you, it sounds like you have done really well recently!

Is that because you don't want a mortgage or because he doesn't want you on it?

Most banks don't allow this anyway

And it's a red flag for him even to suggest it as it leaves you vulnerable

This is a very odd thread.

OP, there is nothing magical about a mortgage. Its just a way of borrowing money over a long period, to buy a house. My DP and I have just taken out a joint mortgage and we're ten years older than you, so your age is not an issue. What matters to every mortgage lender is, can you afford this mortgage and will we get our money back, either in the short or long term. Long term, they get their money back by you making your mortgage repayments every month. In the short term, if you dont make the payments, they will get their money back by taking the house away from you.

You can probably afford a 30 year mortgage because your DH is only 35. How much is an average house in your ideal area? Go on your bank's website, and have a play with their mortgage calculators. Put in your deposit amount, and the amount of money you could afford to repay each month, and see what they will lend you, and then have a look on Rightmove to see what that will buy you. You might be horrified, or you might be pleasantly surprised.

It's true, I am at the most comfortable and happiest time of my life with time to spare and a wonderful family, and the idea of messing it all up is scary.

And believe me I never envisaged I would be in this position 7 years ago. I would have laughed in your face.

He's 28 (I know that's not exactly ten years but I was rounding)

The first one. And we didn't realise it wasn't possible but do now.
A lot of this comes down to trust and chance, I mean we are married so that's one thing.

In your position I’d definitely buy your council house and use it to sell on and trade up a few years later.

The discount you get is so massive that it would be a huge help to your plans.

If self employed you’ll need to show a lender at least two years worth of accounts as proof of income. Definitely get a joint one- better protection for you both and they’ll lend you more.

Well I do; it's an agreement to pay back money with home as collateral.

Thanks for the lesson. Impressive from someone who knew nothing about mortgages a few pages back.

You do own the home as soon as you buy it. If you have a mortgage there'll be a charge on it and it can be repossessed, but you do own it.

Anyway, my post was more of a general question. Have people started to see "getting a mortgage" as the aspiration rather than "buying a home"? Is this an inevitable result of property being seen as an investment rather than a home?

But adding another person to the mortgage will not make reduce the amount you can borrow. The other person could have zero income and it would still be fine if the first person earns enough.

That was true with second house not with our first despite it being the same lender.

First house we could only borrow what we needed with me off the mortgage - and believe me I queried that myself with them as it made no sense. They claimed it was because we were just over normal borrowing limits allowed because we had 35% deposit - still made no sense but it was accept it or lose the house. When we sold that house I had to sign loads of additional paper work with estate agent and solicitor that said I would leave when it was sold despite not being on the deeds so clearly there was some additional risk.

How much are the houses he is interested in buying? You may not be able to afford the houses he aspires to. You may be paying a lot more for something that isn't objectively much better than where you live now. Most first time buyers I know have made big compromises buying their first house as houses are so bloody expensive. Do look objectively at your current home and the houses you could afford to buy - are you getting a much better quality of life to compensate for the extra costs and reduced security?

Half of marriages end in divorce. I'm sure lots of those couples started out saying they definitely wouldn't divorce, but sadly many marriages don't last. Do consider that if you separated, whatever share you got from the divorce probably wouldn't buy you a new home. And getting a council house again in the future may not be possible. And whilst you say you could move away, actually you can't move a child away if their other parent opposes it. You have a secure home now, if you gave up your tenancy then divorced you may not have a secure home.

Right to Buy has been really bad for the country, but could be really good for your personal circumstances. Say you got a 35% discount on the price, if your current home is worth 150k that is 52.5k you have 'earnt' by buying under Right to Buy. Obviously I don't know what your current home and area are like. There are some areas so awful that I'd not want to live there for 5 years even if I got 52.5k at the end.

Thank you for this.

I might get flamed for this but I think it's worth saying. You need to make sure you are well protected OP, for both yours and your daughter's sake. You are 40 years old and your husband is 28, there is every chance he might not want a 50 year old spouse at 38. That's not because of your genders btw, I would say that to anyone. Of course age gap relationships work sometimes, but it's always worth protecting yourself in case it doesn't.

You definitely shouldn't be giving up your secure housing and your daughter's home for a 28 year old with not much more than high aspirations. Yes he may be doing his level 4 (equivalent to a college diploma I think?) but he has many many more years before he is making the big bucks he so desires, if ever

@Lb482 would you make much more money with nutmeg/moneybox as opposed to a standard LISA? I'm currently saving with a LISA, looking to buy in maybe 3/4 years time. If I were to save the maximum each year with a LISA, would I make quite a bit more on top of this going with nutmeg instead?

Well yes and that is exactly the worry isn't it.

I could just stay put which would be fine for me of course. I could tell him all that and say I'm not willing to risk it and he would have to give up on his attempt to improve my life along with his.

I could have my daughter end up wanting to spend more time at his house, even for a short time, or end up having to split up if he's not willing to live here with us. That could all be his fault too but it would still be shit for me and our daughter, who would be devastated.

Or I could allow him to keep facilitating me becoming debt free, supporting us financially giving me freedom to enjoy life instead of let work cause me mental health problems, and in a few years (after becoming in the know on it all) sign up for a joint mortgage with him in a nice new house.

This is my dilemma and I don't think there's any easy answer.

I've never had semi mental retardation insinuated at me before. I will say that when I worked in a hospital I realised that had the diagnostic criteria for autism and ADHD were around when I was a child I'd likely have been diagnosed with both.

I'm trying my best. I was happy to end it all ten years ago and probably offed quite a few brain cells in that year. Not sure how or why I survived, but here I am, trying to do my bloody best.

No problem, just show it to your husband and if he is a good accountant it will all make sense to him 🙂

He's far from an accountant. He's training from the bottom up. I will be showing him, and as he reminded me (I tend to catastrophise and panic) this isn't happening tomorrow. It's happening when we've both hashed it all out together.

I have a similar story.

I would never give up my council property and if I did no way would I ever move into a house where I wasn’t on the mortgage.

If he buys a house in his name, that’s his. You keep your council house. Once your out you’ll never get back in.

Plan for the worst. Deaths happen. Break ups happen. Illness happens.

My advice to you is to concentrate on increasing your income, get your pension sorted, life insurance, etc.

Have you though of doing a council house exchange? That’s another option to get a bigger place or move to a different area.