It has recently been reported that more than one in three new mortgages being taken out today will extend beyond the borrower’s 65th birthday, the Council of Mortgage Lenders (CML) has said.
Extending mortgage terms and the older age at which buyers are now able to climb on to the property ladder mean that nearly 35% of new home loans are not expected to be redeemed until the borrower has passed the nominal retirement age of 65, the CML reported on its website. In light of the financial crash we must ask ourselves, is this sensible lending?
The articles goes on to say that in recent times, a growing proportion of mortgages extending beyond the age of 65 have been taken out by home movers, now accounting for around half the total. This is very concerning if borrowers do not have sufficient repayment vehicles to take care of outstanding mortgage balances following retirement. This situation also adds significant pressure on those over the age of 65 to continue working to ensure the mortgage repayments are being serviced if they do not have the funds to redeem it in full.
The number of first-time buyers taking out mortgages that will mature beyond the age of 65 has also been creeping upwards, and accounted for 21% of the total in the fourth quarter of 2014, the CML said. Many of the younger borrowers are applying for capital repayment mortgages over 35 or 40 years to ensure the repayments are kept to a manageable level but continuing to extend the terms beyond retirement could prove problematic in the long term.
An increase in the proportion of first-time buyers who are taking out longer mortgage repayment terms is contributing to the trend of people getting a loan which will last into an age when many people would be thinking about putting their feet up.
Cash buying property companies, like UK Homebuyers Ltd can offer a simple solution for those who have retired and still have a mortgage. If the vendor is willing to downsize, UK Homebuyers Ltd are ideally suited to purchase the house with cash so the vendor can redeem the mortgage, move into a smaller, more manageable property without the stress of mortgage repayments hanging over them. UK Homebuyers ethos is to make selling a house as simple and hassle free as possible which is ideal for those over 65 who are not interested in having a for sale board up & selling via an estate agent on the open market.
If you are in this situation or similar, get in contact with the friendly staff at UK Homebuyers Ltd and discuss your options on 0800 051 7645, lines are open 24/7!!