First time housebuyer at 50+

My husband and I have split up and after dividing up the house and other finances I find myself looking for a house in the same market as young first time buyers. Although I have some deposit, I will need to find a mortgage of around 80k. This shouldn't be problem as I am in a secure job and 3x my salary should cover it just about. However, unlike first time buyers, because I am nearly

54, I in fact only have 11 years in which to repay it. This would make repayments horrendously high. I have no savings although by the time I retire my elderly mother will probably unfortunately no longer be with us and I will inherit around 300k. Obviously I can't bank on this - at this rate she might well outlive me!

Can anyone advise me the best type of mortgage to go for? And is there a company or a forum that specialises in this sort of thing that might advise a different course of action ? I live in a rented house at the moment so there is no reason to rush into this although the longer I leave it, the shorter time I have to repay any mortgage.

Thank you

Jennie

Reply to
J Ashton
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Horrendously? Well, at 6% interest, 11-year repayments should be about 62% more than 25-year repayments. At 4% interest this becomes 78%.

Also, you will have a pension, won't you? So repayments need not stop when you retire, but you may wish to budget to be able to scale them down at that point.

You shouldn't automatically assume you need a 25-year term or indeed an

11-year term. Who's to say you will in fact retire at 65? There are moves afoot to raise the retirement age, though it's unclear what the timing of this will be, and of course your own aspirations and preferences will play their part too.

You need not choose a repayment term to coincide with when you plan to retire, but because the length of term will determine the size of your payments, you could scale the term to suit your budget. So, for example, using 6% interest rate figures above, if you can afford to pay 62% more, you might as well do so, but you could go for something like a 15-year term, which would make your repayments only 32% higher than with a 25-year term. Then, if you still retire at 65, you'll be

11 years into a 15-year term, with nearly 65% of the loan paid off. At that point you could reschedule, stretching the remaining 4-year term to as long as it takes to reduce your payments to what you're comfortable with.

Against that you should set the fact that house prices are so high at the moment that it's not a good time to buy. You may be better off staying as you are. Could you move in with your mother? She'll need looking after at some point if not already, and if you do it, or some of it, she wouldn't need to pay someone else to do it, and could afford to let you live there rent-free.

Reply to
Ronald Raygun

Consider renting for now and waiting for the expected houseprice crash to occur. You might save tens of thousands this way. Visit

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and read the articles, look at the forums.

Reply to
John Smith

it. This would

At the moment I pay around 350 per month rent. To have to jump to 8-900 per month mortgage feels horrendous to me!

Yes I will get a pension, but I didn't think it was possible to get a mortgage to extend beyond pension age. Is there a company that specialises in these? I haven't seen any literature from banks etc.

My aspirations were to retire 4 years ago and go out and get a life! As it is I'm contemplating dropping a day's full time work, so I can at least do something else on that day.

Could you move in with your mother? She'll

She lives around 300 miles away so not practical. She's very independent and well at the moment. Also I want to catch up on some of the life I should've lived in my 30s and 40s, not suddenly live an 80 yr old life. Selfish I'm sure but...............

Thank you very much for these replies, lots of food for thought

Jennie

Reply to
J Ashton

I don't know about specialising, but I gather most normal lenders wouldn't refuse to lend beyond normal retirement age. One occasionally sees reports such as an 80-year old getting a 25-year mortgage loan.

Meanwhile, back in the real world, ...

Certainly worth doing more than just contemplating. You'll find that because of the progressive nature of the tax system, if your gross income drops by 20% as a result, your net income won't drop by anything like as much. For every pound you nominally earn less, you will take home only about 68p less. Check it out!

Mind you, lower income limits how much they will lend you, but is renting really so bad? If you need to earn *so* much to afford to buy, is ownership worth losing life over?

If you *are* going to buy, and have evaluated your affordability, it's worth postponing going part-time until after the mortgage is in the bag. For the purpose of income multiples, they look only at your present income, and if you subsequently reduce it, they don't care a jot.

Reply to
Ronald Raygun

Can I ask what you would consider as a period you would like to pay the mortgage back in. Are you even concerned about paying the mortgage back? If you are not then there are options you can take to get the funds now and only pay them back on your death through the sale of the property.

Reply to
Betagam7

Could you explain how this would work? I certainly wouldn't want to leave my children with a load of hassle but it certainly sounds an attractive idea. though obviously I wouldn't then be leaving anything of value to them, which is most of the point of buying a house at this late stage.

As a result of this discussion and other advice received, together with the very scary Pensions Service letter that arrived today (did everyone over a certain age get this?) I've decided that I need a proper financial healthcheck so I'll be looking for a financial adviser first thing tomorrow. Thanks to everyone.

Jennie

Reply to
J Ashton

Secure Home Income Plans ?

Investigate a DIY version, avoiding the charges, with your children though.

The other option is to accept the home will be sold when you die, which frees you from the worry of repayment. You could pay interest only. The house is sold either by your estate or the mortgage company when you die and the proceeds used to pay of the mortgage and the remainder left to the estate. Many single people to not have life cover to pay the mortgage off for precisely this reason.

This changes things. If you're looking at it primarily as an investment then the purchase price is critical. In a lot of areas, houses now offer poor value for money. See the Nationwide Building Societies long term real house price trend graph at the bottom of their monthly report and the numerous discussions in the uk.finance archive As a result of this discussion and other advice received, together with the

I haven't received anything (36) although I've received a letter from my pensions companies imploring me to contract back in to S2P, and when I decided to leave things as they were, another one. (I wonder at what point it becomes incitement)

Financial advice is so often flawed by the payment of commission to the advisors. By all means get them to take a holistic view of your finances, but check recommendation out on here or The Motley Fool which between them are the best places for financial advice in the UK.

This is a good health check to get you thinking -

hth

Daytona

Reply to
Daytona

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