When it comes to securing a mortgage, lenders commonly have non-negotiable criteria such as age. Many lenders have an average maximum age at the end of the mortgage term, usually between 70 and 75. Understandably, lenders are keen to avoid the risk of borrowers being unable to pay the debt further down the line.
But with more people stepping onto the property ladder later in life, working well beyond state retirement age, or simply living longer, there are a great many potential older borrowers who are unfairly penalised by this age limit, and struggling to either purchase new property or remortgage.
This is especially strange because many older borrowers looking for large loans are some of the wealthiest clients in the market. For such clients, old age and retirement do not represent a total loss of earnings; for many, retirement continues to be a period of stable and considerable income.
So why is it harder for an older borrower to secure a large mortgage?
One problem is that income post retirement can be considered difficult to project. Many clients who are successful throughout their working life may technically be retired, but they will continue to receive income because of their fruitful careers.
For example, I recently worked with a client in his seventies who had enjoyed a successful career as an illustrator. My client was still working on occasion, but the bulk of his income came from royalties; such an income is difficult for lenders to understand as it is unpredictable.
Alternatively, many older individuals have large shares and property portfolios—these can give a healthy income, but non-vanilla income structures can be difficult for lenders to understand.
How can Enness help?
If you are an older borrower looking to secure a large mortgage, discussing your situation with a broker is the first step. We are extremely experienced in arranging large mortgages for older borrowers, and as such, we will understand your income, whether that be from a pension or another source. This understanding is key to presenting your case in the right way when applying for a mortgage.
Our key resource in arranging large mortgages for older borrowers is our lender network—particularly our relationships with numerous private and specialist banks. Private and specialist banks take a more personal and holistic approach to your financial situation, considering applications on a case-by-case basis.
These lenders are also more inclined to offer large loans on shorter terms, as they have a greater understanding of the range of loan exit strategies high net worth older borrowers might have. We can arrange for you to meet with private banks, enabling them to understand the full scope of your background and build a relationship moving forward.
Lenders will also feel more comfortable with older borrowers when appropriate life insurance is arranged; we are extremely experienced in the sort of insurance you will need, and have a trusted partner who can advise you accordingly.
The key thing is that we gain a thorough understanding of your background, and then make the right introductions for you with lenders. Many of our high net worth older borrowers post virtually no risk to lenders—it is simply a case of understanding your case, and presenting it effectively to the appropriate lender. If you are an older borrower looking to secure a mortgage or refinance a property, please don’t hesitate to get in touch and I would be delighted to assist.