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Over 50 and a first-time buyer? Your questions answered

about 2 months ago
Over 50 and a first-time buyer? Your questions answered

Are you one of the growing number of over 50s who are considering buying your very first home? If figures from the Financial Conduct Authority are taken into account, you’re not alone.   

Over the last five years, the number of UK property buyers who are older than 50 has increased sharply, while first-time buyers under 30 are becoming more scarce. To illustrate, the number of first-timer buyers aged 56 or older grew by 7% between 2018 and 2022, while the number of first-timer buyers aged between 18 and 25 fell by 1.7%.  

Buying your first property at 50 or even older can be more straightforward than you think. Our question and answer blog is designed to clear up any grey areas and encourage purchasers to take independent financial advice.   

Q. Will a lender reject me if I’m over 50?

A. Every lender will have their own upper age limits for mortgage applications but they’ll usually want the borrower to be aged between 70 and 95 when the mortgage term ends.   

When considering who to lend to, a bank or building society will weigh up how old the borrower is at the time of application and how old they will be when the mortgage term ends with their assets and earning potential.  

Those in their early 50s taking out a mortgage over 25 years or less stand the best chance of securing a home loan, as they’re usually at their maximum earning potential with a nest egg of savings too. The older a borrower gets, the less choice of home loans there will be, plus what is available may have more restrictions.  

Q. I’m an older buyer with debt, will that harm my chances?

A. Potentially. It’s always wise to apply for a mortgage with as little debt in your name as possible – no matter how old you are. Debt equals a poor credit score and this will affect a person’s borrowing power. Additionally, younger borrowers will have longer to repay debts, so will be looked upon more favourably. Over 50s should clear credit card, car loan and student finance before contacting a lender.  

Q. I’m due to retire during my mortgage term, what effect will that have?

A. A lender’s primary concern will be that the borrower can always afford the monthly repayment. Naturally, they’ll be assured by an applicant that’s in employment.   

If you take out a mortgage over 25 years but are due to retire after 10, for example, the lender will want proof of how you will continue to make repayments during retirement. Examples that can work in a borrower’s favour include a pension income and/or lump sum, ISA savings or other assets that can be cashed in to settle the mortgage.  

Q. Can I get a mortgage if I’m already retired?

A. If you are considering taking out your first mortgage but you have already retired, there are a number of ways you can improve your chances of securing a home loan. These include gaining employment before you make the application, putting down a substantial cash deposit, opting for the shortest repayment term feasibly possible and having proof of alternative funds in the form of pension, savings, annuities or shares.  

Q. What type of property should I buy as an older purchaser?

A. If you’re over 50, it might be that your first property purchase is also your last property purchase. Practical considerations include accessibility, adaptability, size, running costs and location. Older borrowers should also be wary of purchasing a property of non-standard construction (this could include timber-framed, prefabricated and steel-framed dwellings), as lenders aren’t always comfortable with this prospect.   

Q. Can I get a guarantor?

A. This can be an option with some lenders. Usually a guarantor is an older or wealthier  relative who will cover the mortgage payments of a young borrower but the idea can be flipped on its head, with a younger person becoming liable for the mortgage payments of an older borrower.   

Contact us if you’d like to register your details as an older first-time buyer or see an up-to-date list of properties for sale.

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