Remortgages. Not always the most exciting subject – in fact, it’s enough to make your eyes glaze over. But remortgages don’t necessarily need to be about moving home – in fact, if you’re winding down before retirement or thinking about the future, it’s amazing what remortgaging your home can do - especially if you have a lot of equity in your home, or indeed if you own it outright.
Can I get a mortgage in later life?
It’s always best to seek out professional, no-obligation advice before taking out a mortgage on your home. It’s no small decision and can have implications for your retirement and for the inheritance you leave to family. You might be aware of a piece of legislation from 2014 called the Mortgage Market Review (MMR). This imposed a raft of new affordability checks and restrictions for a great number of borrowers, with potential older and retired borrowers being among those hit hardest by the new regulations.
Fortunately, things are now a lot better for borrowers looking for a mortgage in later life. For example, some lenders (including Ipswich Building Society) have removed their upper age limit, making it viable for borrowers to borrow money right up until a ‘major life event’ – in layman’s terms, until death or the property is sold as the borrower(s) enter into long-term care. But what are some of the reasons you might choose to get a mortgage in later life?
Borrowing to purchase a second home
Many older and retired borrowers choose to remortgage their home to facilitate the purchase of a second home – by remortgaging your home and unlocking a significant amount of capital, you could use this as a deposit for an investment property to generate additional income. You could even rent a property out to family members, providing them with a secure tenancy while they secure your retirement! Having said that, many also choose to snap up a holiday home in the country or by the sea – or even a property abroad. Whether you’re looking to invest in the future or escape to your dream getaway, there’s always options available.
Extension/improvements to home or garden
We’ve all been there – the house is looking a bit shabby and you’re running out of space to put things. Or perhaps it’s finally time for that loft conversion you’ve always wanted? In that case, maybe it’s time to consider a later life remortgage - you could unlock some of the equity in your home and use it to complete much-needed (or nice-to-have) improvements to your home or garden.
Gifting money to help family onto the property ladder
The struggles of young people trying to get on the housing ladder are well documented. Indeed, home ownership rates are falling as more and more would-be first time buyers are priced out of the market. It comes as no surprise, then, that older and retired couples in their 60s and upwards are eschewing their luxury holidays and expensive retirement plans in favour of helping children and grandchildren onto the property ladder. In fact, first time buyers benefit from loans and gifts from family members to the tune of £6.5bn each year. If you’re thinking of remortgaging to gift money to kids, we’re more than happy to help!
Where do I go from here?
If you are seriously considering a remortgage, or just looking at your options, speak to one of our friendly Mortgage Consultants for free, expert advice on your situation. Alternatively, you can browse our current later life mortgage products.