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.

Another recommendation for simply adverse, I thought a mortgage was out of my reach due to past issues with debt but they got me a mortgage with a pretty decent rate.

@greasypolemonkeyman we live in the south east so property is very expensive round here although we would both be open to moving to more affordable parts of the country (we would actually like somewhere rural, but no more than 15 minutes drive from a town, if possible - anyone have any suggestions)? I am in my early 60s, DH is in mid-late 60s.

@Namechangedone if you don't mind me asking, how old are you?

I am in my 40's, but they have companies that allow mortgages up until 80 (if that is something you would want to do)

It cost £950 but that was only payable when you have a formal mortgage offer. It's definitely worth giving them a call.

OP why didn’t you find a house in 15 years? What are you looking for now?

When do you and DH plan to retire?

@LittleBearPad - I already explained further up the thread... our house sold quicker than expected and the one we wanted to buy fell through (they decided no longer to sell). We fell into renting, my husband lost his job and several family members became unwell. I am freelance and put my work on hold to look after them - anyone who has looked after family with severe illness will know that it becomes your main focus, you don't stop to think about your finances in the next 5, 10 years etc. Slowly renting and living ate up everything we have and here is where we are now. We are both in full time employment now and plan to work as long as we possibly can because we don't have a choice.

@Namechangedone thank you - this is exactly the kind of help/advice I was looking for.

Don’t panic OP, lots of people retire having lived their lives in private rented accommodation. And continue that way.

I would:

1. check out your potential for housing benefit on your projected retirement income
2. Get on the local housing list NOW and register for any O-55 / 60 properties
3. Talk to a pension adviser about the performance of your pension, how much you could release as a lump sum and what effect that would have on your income ongoing
4. Talk to a mortgage broker about potential for a lifetime mortgage / interest free mortgage or anything else that might be a possibility
5. Read up on pensions and mortgages in retirement. Scour MSE, read the regular articles on Restless - sign up for their e mails, they often offer free pension checks and advice sessions
6. IF you decide to go for some sort of mortgage do your budgets again and again. Factor in maintenance, boiler, everything. Because if you can’t afford to keep up payments you would be in trouble.
7. Personally I would think again about rural. As you age it is not great to be car reliant or not walking distance to a shop etc. With not much money I would want to be close to shops, a library, GP etc. A hospital close by. rural areas are terrible for both public transport and taxis. Imagine life once one of you is gone. If one of you gets seriously ill. My parents lived rural, it was a nightmare once they became frail.

I don’t think you can get a mortgage on the lifetime lease 0-60s deals.

Good luck OP.

I'm sorry but I think you will struggle. Mortgage companies have become a lot stricter about lending and affordability. It doesn't sound like you have a deposit? Is the credit card being paid off or are there missed payments so your credit score is poor?

If you can secure a mortgage, there are some very cheap sheltered accommodation type flats in Birmingham for eg (£70k) but these type of flats will have monthly service charges which will add up on top of a mortgage and bills. They may also be difficult to sell on.

I think you really are better off approaching your local Council re; over 60's/Sheltered council housing. The waiting lists for this type of property are usually a lot shorter than the general council housing list but you or your husband may need to prove a 'need' ie; medical and or mobility issues. Also, once you retire, you may be able to claim housing benefit to cover the cost of the rent and service charges if you have a low pension income. They're usually near shops and services and have good transport links.

Some links:
https://www.ageuk.org.uk/information-advice/money-legal/benefits-entitlements/housing-benefit/

https://www.ageuk.org.uk/information-advice/care/housing-options/renting-social-housing/

(Age UK have lots of good info sections)

Restless Pensions info

OP, are you able to say how much money you each have in your pension pots? People would be able to give much better advice with an idea of the sort of sums you might be able to access.

Given your ages you presumably will have a good idea now of what the lump sum will be so that should help you assess whether you could buy outright or use that as a significant deposit and afford a mortgage. There are some parts of the country which are v cheap compared to the SE (my friend bought a two bed terrace in Hull last year for £80k).

One thing to bear in mind with owning a property is that you will be solely liable for repairs etc, and I know you have obviously had some bad luck but you have racked up debt so trying to obtain an over 55s social accommodation may be the better option even if you have to pay rent for ever.

What I suggested is life time security and a share of home value... what you suggested is 'nothing'.

I'm not sure why you are so stuck on the word mortgage... both are just forms of borrowing for home security my suggestion has more security as OP won't be kicked out for defaulting on monthly repayments (which is basically just the same as renting which is what she wants to stop).

You clearly have strong views against leases for some bizarre reason (they you STILL haven't clarified, in fact you have gone out of your way to avoid explaining WHY this is 'so terrible' for the OP) despite leases being incredibly common in 'elderly independent living' (most people down size and most flats are leases).

I think you're getting fixated on owning a property when in fact you're at the stage of life that many homeowners are selling up to move into rental accommodation like @housethatbuiltme describes. Get yourself on the council 55+ waiting list and in the meantime keep working/plugging into your pension for as long as possible and stop fretting about owning a property and consider being a tenant without the cost & worry of maintenance - find a new (NOT rural!) cheaper area and it could be a real positive start to retirement.

My in-laws sold the family home 10 years ago when they were in their late 60's and got a place in a council over 50's. (no idea how long they waited or if there were savings/pension limits) They've been paying a monthly rent ever since - currently about £450 - and never have huge amount of money but tick over OK on small pension and whatever is left of the house equity (not much to start with so possibly nothing left) and are quite happy without having to worry about unforeseen housing costs or whether the landlord will ask them to leave. They have made the flat their own and are very happy there and there is assistance on call if they get to that stage plus it's already has some adaptations such as handrails, wet room, wide doorways etc.

And further to the ‘rural’ comments, you need to be practical and pragmatic OP.

If you do buy and will be on a tight budget (as it sounds as if you will) you want a low maintenance place with good insulation and good double glazing. The older you get the less able you are to tolerate low temperatures and you don’t want astronomical bills to heat a drafty cottage.

Future proofing is also important: flat access, downstairs toilet.

Continuing to rent could give you the flexibility to move as your needs evolve.

Whitehaven and surrounding villages are very affordable, beautiful part of the country but perhaps too far for you? Cleator Moor is very cheap. I have no idea what it's like to live there but it's on my list as an 'emergency ' place to buy cheaply. But I love the lakes. Nuclear power station notwithstanding.

Otherwise I can suggest wiltshire or the north east.

Anywhere in the Middle is relatively cheap - Birmingham, Coventry, Nottingham, Derby, Sheffield, Leeds. I don't know those areas though. Leicester might be reasonable, or Hull.

These type of later life pensions, are getting rarer and rarer and providers are turning away from them. You're pensions would have to be pretty gold lined and massive to secure a mortgage in this regard, and they'd expect savings to back this up.

"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"

Also most lenders would balk at this and will be disregarded as a deposit, for example.

I'm really sorry OP. Life throws in some awful curveballs.

Honestly? I'd look into something different.

Don't try and get back onto the ladder right now. I wouldn't.

Focus on how you can save money, even to buy a plot. Don't get caught up in expensive mortgages.

Good luck

OP I understand the desire to own your own home, for reasons of security. I bought my house at 51, but with a lot of capital saved and the ability to pay everything off in 5 years. You can get a mortgage at any age, but it will be a shorter term, higher repayments. However what is very apparent as I crunch my retirement figures, is that owning comes with long term costs that renting doesn't. I live in a 800sq feet, semi, south east. I will have to save close to 6 figures to cover 30+ years if i get a good innings, to cover a new roof, windows, fencing, flooring, white goods, plumbing, guttering, wiring, new heating system (who know what boilers will eventually be replaced with), the list is endless. These things may not need replacing but its miserable if they do and you dont have the means to deal with it. In your shoes I'd find a cheaper area, small modern house, with low maintenance (avoid flats with service charges out of your control).

Renting may in fact suit you better at this life stage if you crunch the figures. The flexibility and freedom could be a good thing. Without knowing your 25% tax free lump sums, and annual pension amounts, its hard to comment further. Good luck.

posted in wrong post - oops!

What you could do is look at almshouses. A friend's parents did this when like you, for various reasons they fell off the housing ladder and were facing renting in retirement.

They got a two bed flat in a modern complex run by an almshouse (they had to be over 60 and lived in the borough for 5 years). They did a shared ownership type deal so bought a share with a cash lump sum and the rest was rent.

The complex is lovely - private two bed flat, already adapted for older age (wide doorways, wet room) but private and very well designed. The block also has a communal garden and common room.

OP - I know that this isn't the message you want but I agree with others on this thread. You have debt (a fairly significant amount) and no savings. You clearly cannot manage your money and are living beyond your means. You have no money for a deposit, stamp duty, legal costs or removals. Moving house is not cheap.

No specialist broker in the world can fix these fundamental issues. You need to take a different approach. A long term secure tenancy is most likely your best option.

You need to take a good look at your finances and get back on track before this goes further south.