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Remortgage advice - Older mortgage applicants find it increasingly difficult to secure lending
Remortgage advice - Older mortgage applicants find it increasingly difficult to secure lending
There has been an increase in banks refusing mortgages to older mortgage applicants as they are more risk averse than they were in previous years.
Wilmslow,
Cheshire,
United Kingdom
(prbd.net)
08/12/2012
There has been an increase in banks refusing mortgages to older mortgage applicants as they are more risk averse than they were in previous years. This is making it hard to get remortgages and the remortgage advice is to seek advice from a reputable mortgage broker.
Many older borrowers are unable to remortgage at present, as the banks lending criteria still shows no signs of abating. Since the credit crunch, many older people are increasingly risk averse.
Banks and building societies are refusing to grant lending to borrowers in their mid 60s and even in their 50s if the loan expires after they have taken retirement or is beyond the traditional pension provision.
In recent years lenders did not stipulate the maximum age at the end of a mortgage term, as long as the loan repayments were affordable to the borrower. However this has now changed.
The problem originates from the interest only loans that were granted, and now many people have reached the end of their mortgage term with no means to repay the shortfall. They have no repayment vehicle because of underperforming pensions and endowments, which were relied upon to make up this shortfall.
In many cases, lenders will not grant a remortgage unless they go onto a repayment mortgage, making their outgoings much higher and unaffordable.
Offering an interest only mortgage to a mature borrower is far too risky, however, they could look at paying a higher rate interest and any associated charges with equity release.
Banks are having to be very careful about who they lend to, especially where the income is likely to drop further down the line. Lenders need to be flexible and start looking at lending beyond 70 years of age.
Richard Ignatowicz is a whole of market broker at Mortgage Savers. He specializes in buy to let mortgages and remortgage advice to investors and homeowners. He says:
"Lenders' need to base their decisions on their individual circumstances and their ability to pay rather than their age. They should take a look at their retirement provisions and try and cut back on the rocketing tracker rate deals."
Notes to Editors
Mortgage Savers is a "whole of market" mortgage brokerage. We are fully qualified consultants, not sales reps; offering totally impartial help and guidance. We help people find the best residential, commercial or buy-to-let mortgage product available from over 200 lenders offering in excess of 10,000 mortgage products. To find out why you should use a broker who is also an investor click here. For more information on Mortgage Savers click here.
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RBS and NatWest have abolished their interest only mortgage deals to push applicants onto repayment deals.
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