Mortgage as a pensioner

[househelpplease12]

Hello
My husband and I are approaching a very difficult position... we used to be homeowners but sold up and couldn't find the right home so ended up renting 15 years ago. Over the 15 years, all the money from the sale has gone and we now live month to month with no savings at all (and credit card debt). We are both approaching retirement age and worried about what the next step is... both mothers are in care homes so there won't be a substantial inheritance. Our pensions are not too bad (we are paying as much in as we can) - how can we go about buying a home and/or securing a mortgage when we retire. Is this even possible or will we be renting for the rest of our lives?
Please no judgement - the situation is giving me huge anxiety and sleepless nights. Any help would be gratefully recieved.

I would speak to a specialist broker. It may be possible to get a mortgage if you have decent pension income.

On a wider note I think you need to sit down and honestly interrogate how you arrived at your current circumstances. Why did you sell your house and then apparently find nothing suitable to buy for 15 years. That is an unusually bad decision.

Apply to go on the housing list for an over 55's place in the area you live in. I live in London and you only have to have lived in the area for 5 years.

(You won't get a mortgage, if you keep renting you will get pension credit/housing benefit)

If you have a decent pension you might be able to get a mortgage but it is unlikely to be a very long one.

Other option is to use both of the tax free lump sum from pensions and use that to buy something in a cheaper part of the country (if enough)

No savings?

I'd suggest looking at council run over 55 accommodations.

Usually fairly cheap rent - there are several couples at our local ones

,"if you keep renting you will get pension credit/housing benefit" this won't happen if they have a decent pension

How is your second paragraph helpful?

How will that help OP find out if she can get a mortgage?

You will each be able to take 25% of your pension fund as a tax free lump sum. Although it would significantly reduce your ongoing pension income.

How much would that add up to? Enough to buy you a small flat somewhere? If not, you'll have to carry on renting.

As others have said, apply for local authority over-55 housing. Why do you want to own your own home now, when it hasn't been a priority for the last 15 years? Renting in old age means you won't need to worry about maintenance, and you could possibly move around - arranging swaps - without major cost. It suits a lot of people.

Get a mortgage now. Just buy anything you can.

At least with pending retirement you have more flexibility over location as commuting time won't be a concern for long.

Pensions aren't designed to pay housing costs. You need to get mortgage free asap.

Re:debt go to a free debt advisor & try to shift this asap. Try to clear it pre-mortgage application.

If it's really huge consider bankruptcy. With no assets you have nothing to lose if you have truly given up on owning.

There are still plenty of places in the uk where you can buy a 1 bed flat for under £80k so you wouldn't need much of an inheritance to buy something like that.

@bellac11 because it isn't just about a mortgage is it? It's about buying a house. So the OP needs to ensure what ever issue , emotional or practical, that led to them not finding the "right home" for 15 years, has been addressed.

Yes I agree.

We all make mistakes in life. But it's good sometimes to analyse those mistakes and why we made them so we can gain self awareness and hopefully recognise unhelpful patterns in our behaviour.

Along with practical advice I don't think it's wrong to suggest that @househelpplease12 also does some self reflection, that's not a criticism of them.

Getting a mortgage is all about affordability and being older the mortgage will be likely to be of a shorter term. You would really need a decent deposit with the ability and provable income to make the repayments ie a fairly hefty pension pot. Credit card debts will not go in your favour.
suggest you speak to a mortgage broker with access to the whole of the market

Leaving the mortgage aside for a minute, how much credit card debt do you have? And how fast can you start saving? You'll need enough for a deposit, legal fees, survey etc in cash so that needs to be a consideration too.

What sums of money are we actually talking about here in terms of current income/future pension income/credit card debt? How far off is retirement? It would be easier to make appropriate suggestions if we knew this stuff.

That sounds like a scary situation, Op. Hopefully some of the posts on this thread will be helpful to you.

What age will you both be when you retire? How far away is that? If a mortgage isn't possible then as a pp has said there are council or housing association run retirement properties in many areas usually open to over 55's. You may also find retirement flats to buy for over 55's that are cheaper than buying an ordinary flat as you can only sell to over 55's. The newer ones though aren't cheap at all and have huge service charges.

Even in the absence of specific amounts to understand the problem more clearly, one observation I will make is that in order to have spent all the equity from your previous property (whatever amount that was) and also accrued credit card debt, then you've been spending over your income over the past 15 years - whether that's been driven by one or two specific crises, an overall cost of living shortfall that's not been manageable any other way, or a general dripping away on one thing or another. I think the suggestion to sit down and really reflect on how that's come about is a sensible one because whatever you conclude it's likely that you're going to have to really cut back on your outgoings. A) because you need to clear the credit card debt and build up some savings whatever else you do; B) because your retirement income is likely to be lower than your current income, and C) because if you want to bring off a home purchase on what's likely to be a shorter-than-average mortgage timescale, you're going to need to hustle somewhat on order to free up as much money as possible to go towards that.

How much do you have in pension savings? Would the tax free lump sum be enough to buy a small place?

Thank you for those of you who have offered supportive messages - they are really appreciated. I am not proud of the situation I am facing.

To answer the questions of why it hasn't been a priority to buy before... I don't want to go into too much detail (nothing illegal or dodgy, just potentially outing) but my husband lost his job, our children were at good schools and we couldn't move them and several family members became ill so I looked after them (my work was freelance so I wasn't entitled to anything - I didn't work so I didn't get paid). No, I didn't get carers allowance or anything like that - looking back, I was very naive. Anyone who has looked after unwell family members will understand that you don't really think about yourself or your finances in 5, 10 or 15 years, you just plough all your energy in helping your family member as much as you can.

Credit card debt is about £3500, plus we owe our energy company about £2500. Nothing else on top of that.

That sounds really tough. I think getting shot of that debt is probably your first priority - do you have a timescale in mind for being able to do that?

OP, I have a mortgage until I turn 85 years old, so it is possible. But if I had approach the high street mortgage lenders myself I would have got laughed out of time (I made the mistake of asking my bank). I had to use a specialist mortgage broker and that's the only way I got my lovely home.

Even if you don't act now, it's worth talking to a broker at this stage, to rule out any action you could take now that you might regret not taking later.

I don't know how it works exactly but theres a thing taking over loads of properties around here called 'HW ages 60+'.

This is what one of their ads says (but there loads, I just copied the first one to come up on rightmove):

OVER 60s can secure this property with a HOME FOR LIFE from HOMEWISE

Through the Home for Life Plan from Homewise, those AGED 60 OR OVER can purchase a Lifetime Lease and a share of the property value to safeguard for the future. The cost to purchase the Lifetime Lease is always less than the full market value.
OVER 60S customers typically save between from 20% To 50%*.

Home for Life Plan guide price for OVERS 60s: The Lifetime Lease price for this property is £47,000 based on an average saving of 33%.

Market Value Price: £70,000

Hasn’t OP got enough problems without being encouraged to take out a dodgy “lifetime lease” instead of a straightforward mortgage?

My neighbour is 90 next year and she's paying a small mortgage still. I'm not sure exactly when she took it out but maybe 15yrs ago. Obviously, mortgage requirements are very different now and I think she borrowed against her home.

So that was probably no use at all! Good luck though, speak to a specialist and see what they say.

OP asked whats available, I started my post CLEARLY with 'I don't know how this works' but I posted whats available here to pensioners in the housing market which is SPECIFICALLY what this thread is for.

Given you posted nothing helpful to the OP at all and give her zero options to research just put the boot in about 'analyzing' her past, I don't think you can sit on any high horse.

Work out what your tax free lump sum will be when you retire and where you can buy something for that amount.

Also work out check your ni contributions and if you need to purchase contributions