Too old to buy a house for the first time?

[Mortagemoans]

I'm 51 and my partner is 53. We have no savings but are about to inherit some money. After paying off £25k of debt we will have approx. £70k. We've moved about the UK on short term contracts and have always rented. I just went back to work part-time after not working out the home for 10 years and earn £8k a year. My partner has just secured a full-time staff job at £60k a year.

I have only just started to pay into a company pension, my partners pension from a previous employer will realise about £11k a year - he'll accumulate a bit more paying into a pension via his new job. We like where we live but the cheapest houses round here start at offers over £250k. We have 2 children aged 8 and 11.

I am really worried that we are going to struggle to get a mortgage even with a £70k deposit. Even if we worked till we were 68 that's only a 15 year mortgage. I've used some basic online mortgage calculators and the repayments are horrendous. However I'm worried that if we don't buy anywhere we are going to be skint pensioners who can't afford to pay our rent and eat. Anyone got any advice?

My partner is 53 so we just had this. I can't be too much help as we did decide to go for a 15 year mortgage and bought something inexpensive in a town a bit further from the city we work in than we would have hoped.
We massively cut our food bill basically in order to save a deposit and pay mortgage..plus side is you do pay less interest than you would on a 25 year mortgage.

You won't get a mortgage that extends past the elder applicants 70th birthday, I'm afraid.

That's interesting. It would be illegal age discrimination where I'm from.

My mum has just got a mortgage at 56, alone. It can be done, you can see a financial advisor through the bank. They're very knowledgeable and don't cost anything.

It's not illegal age discrimination, its the simple fact that you shouldnt' be given a mortgage that you won't be able to pay back. It would be irresponsible and illegal to do so.
If OP gets a mortgage that extends to her 75th birthday, for example, how is she going to be able to pay it?

OP, I'm reckoning your HH take home must be 4300, and a 15 yr mortgage (assuming 5%, 180k borrowed) repayment would be £1450/month. Are you sure home-ownership is beyond your means?

Happy to be corrected if I calc'd something wrong.

As PP said, get a broker or financial advisor. Beware of ones tied working for one place as they may only tell you about those products.

Money Saving Expert is a good place to look, you want a whole of market broker or independent financial advisor.

I would think they can advise what you can get (and there will be something) then you can look at what you can afford.

Good luck!

In the long run it should save you so much on rent and gives your whole family security. Can you look around and be more flexible on location to find a more affordable house?

Cheerios, It would be illegal where I'm from. People still work into their 70s where i'm from. How people will get their money in 15 yrs time is a bit like asking a woman about her childcare arrangements, the bank can't go there. My step-mom was stressed out thinking she'd have to work until 81, they did take out their mortgage on that assumption, but other events happened so she got to retire much younger after all.

Have you found out how much you could borrow?
Due to having dependants and your age, it might not be enough to buy. If that’s the case, I’d do the following:

• invest the inheritance in stocks and shares ISAs and not touch a penny of it for the next 15 years.

-save as much possible in pensions especially in your parner’s name. It comes of gross salary so if he saved 20k per year, you’d be 1k worse off per month after tax. -when you reach retirement, he could cash in his 25% tax free lump sum + you’d use your ISA money to pay cash for a cheap property to live in in your retirement. With the above scenario, you’d likely have close to 200k in today’s money to have a place in retirement. You’d also have a bit of pension on top of the state pension peanuts. -also look at the legal implications not being married so you don’t end up skint and having no pension if you split up.

My mortgage runs til I am 75

Don’t you need to have an adequate pension to get a mortgage into retirement? I can’t imagine a bank lending on the basis of paying back out of the state pension.

No, I just said I am working til I am 75, easy! Its age discrimination to make you retire.
We will actually just sell and downsize before then, or remortgage on a shorter term in a few years

Age discrimination to assume that you won’t be able to keep up your earnings at 75 I’m really surprised but fair enough.

Mortgage to age 80, using your earned income for Affordability eg not concerned with pension income is doable (max 25 year term) Or as others have said to Age 75 (max 35 year term).

Thanks everyone. Lots to mull over. Think it is time to get some serious financial advise just need to find someone reputable. It seems it's possible but not necessarily advisable. I suppose I could extend my hours when the kids get older but my career is no where near as lucrative as my other half's.

Well, you could get a house based on a mortgage till 80. But then, when you’re ready to retire and children have flown the nest, just move to a smaller, cheaper and mortgage free place.

Could you buy a property in a different area and rent it out? For example-

2 bed end terrace- £60000
Deposit- £12000
Mortgage over 12 years
Rough estimate of mortgage repayments £450pcm
Estimate rental income £550pcm

So after 12 years you own a property and if push comes to shove you could move into after retirement and have no housing costs if pension pot is bleak. Plus a small income per month to set aside for repairs/rental costs. And a chance the property price could have increased.

Rough figures but you get my drift.

Shakey, with those numbers, you’d have to add money to keep the place - income tax + various maintenance costs and repairs etc. Not sure if a bank would even lend with rental income that low compared to mortgage and other costs.

There are still plenty of lenders who will consider up to the age of 80 and one or two others who don't have an upper age limit, although they will consider your circumstances on a manual process. I'm a mortgage adviser and help with these enquiries regularly. Post retirement(70) they will look at your projections and of course the size and term of the mortgage you take on will be calculated for affordability. Happy to help if you need some advice.

Sorry user just seen your reply. Thanks for the offer of help. Will be something to think about in New Year for sure.

We just did this - my DH is 53, I'm 46. I said on the mortgage application I'd retire at 67, and the mortgage company decided that the mortgage could be up to my retirement age, despite DH's age, so we got a 21 year mortgage.

DH is the main earner, though my pay's not too bad and would easily pay the mortgage in 14 years or so I think.

Your deposit is much better than ours was - we spent forever scraping together a 5% deposit of £20K + another £10K stamp duty, there was no way we could have got more together!

We found both the MSE website and London and Country mortgage brokers to be very helpful.