I am a self employed 63 year old, can I get a mortgage?

Posted on 22 September 2012 by Graham


I am 63 years and a self employed builder.  I currently own, mortgage free, two properties in Northamptonshire with a joint rental income of £12000 per annum.  Can I get a mortgage?

Graham

Do you want a residential mortgage or a buy to Let mortgage?  The answer to you question is probably yes to both, but it is going to depend on your earned income, how much you want to borrow and what you want the money for?

For a residential mortgage all lenders will want to check that you can afford the mortgage now and when you retire.  You will probably have to produce 3 years accounts for your current income and then depending on when you intend to retire and whether or not the lender thinks this is reasonable, evidence of your retirement income.  Most lenders will allow a mortgage term that takes you up to age 75, with a handful longer than that.  Unless you have an investment vehicle already in place that will repay the outstanding capital at the end of the mortgage term even fewer lenders now allow an interest only mortgage which relies on you selling your home to redeem the mortgage.  I suspect that you will have to consider a capital repayment mortgage and the monthly repayments over a short mortgage term may make this very expensive.

For a Buy to Let (BTL) mortgage you will still need an earned income to show that you can cover any periods where the property is not let, but the amount you can borrow will be determined by your monthly rental income.  You can expect lenders to want the rent to cover the monthly interest payments by at least 125%.  The challenges regarding interest only and capital repayment remain the same, as does the age/term restriction.  That said, 1 of the major BTL lenders will allow a mortgage term up to age 90.

I believe we can help you and that you would benefit from speaking to one of our independent mortgage advisers.  Please call 0344 346 3672 and tell the consultant the date and title of your question, they will then be able to help you find the right mortgage for your situation.

Peter

Answers provided in response to Ask the experts are based on the information provided and do not constitute advice under the Financial Services & Markets Act. They reflect the personal views of the authors and do not necessarily represent the views, positions, strategies or opinions of John Charcol. All comments are made in good faith, and John Charcol will not accept liability for them.

We recommend you seek professional advice with regard to any of these topics where appropriate.

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