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Q: I am 55 years old and I want to remortgage on at least a 15-year mmortgage term. Will a mortgage lender allow me to take out a mortgage which will run beyond the age of 65?
A: These days, most mortgage lenders will allow mortgages to run to the age of 70 or 75. Those lenders going to age 75 include Abbey, Halifax, Nationwide, ING and Virgin Money. The latter will actually lend to 75 years and 364 days. They willbe careful to establish that you will be able to afford the repayments beyond normal retirement age, so you will have to provide evidence of your expected income in retirement - be that pension income or income from other sources including continued employment.
Some lenders have specific products for lending into retirement. Leeds BS for example will allow borrowers to take a mortgage out up to age 80 with the maximum age at the time of application being 70. The loan to value is restricted to 70% and the rate comes at a premium compared to standard mortgage rates.
For borrowers over 65 who don't want an equity release scheme, the Buckinghamshire BS offers a Retirement Mortgage Product. The minimum age at application is 65 and the mortgage is restricted to 50% LTV. There must also be at least £150,000 remaining equity after allowing for the mortgage with the maximum loan being £350,000.
Q: I am thinking of buying a two-bed flat at auction, hopefully for around £75,000. I have a £25,000 deposit to put down and about £15 more to spend on renovations (the flat is a repossession and may need some work). I think the flat could generate over £500 a month. What are my chances of getting a buy to let mortgage for an auctioned property?
A: Looking at these figures in isolation, there is no reason why you should not be offered a buy-to-let mortgage – but of course there are caveats and things to consider. When you buy at auction, the vendor requires the funds within 28 of the hammer falling. So have your mortgage finance in place beforehand (it could make sense to use a specialist broker for this). If the property needs extensive work the lender could impose a retention, holding back some of the funds until the work is done, and you may need an expensive bridging loan to fill the gap. Don’t forget to factor in legal fees, the auctioneer’s fee and bridging fees on top of the usual mortgage fees. And stick to the golden rule in the auction; do not exceed your budget. Good luck.