If you need to borrow more on your mortgage but your only income is your pension, you might be wondering if this is possible. Read on to discover how Niche Mortgage Info can help you to navigate the lending options available to you.
Borrowing during retirement can be difficult. Although every pensioner is different, and incomes can vary a lot between individuals. So while it might be more difficult, it isn’t always impossible. Lenders will be concerned with two factors: your age and your income.
For the last 10 years, mortgage providers have limited the majority of their lending for residential properties to capital and interest payment mortgages. This helps to ensure affordability, as the monthly payments will clear the balance of the mortgage by the end of the term. However, a shorter mortgage term can increase capital payments and make it difficult to justify affordability. Affordability is calculated as monthly income minus outgoings.
At Niche Mortgage Info, we often see borrowers turning to a second mortgage as a preferred solution. A second mortgage is still regulated the same, but there are some subtle differences. Lenders are more likely to offer higher income multiples and over longer terms. For those on a fixed income, this could be the ideal way to borrow more on a mortgage.
The criteria for second charge lending is typically as follows:
You will need your annual pension statement and the 2 months of bank statements showing your pension income.
If you are thinking about borrowing during retirement, we can help you to make the right choice. We offer access to whole-of-market brokers who specialise in niche mortgage applications. Get in touch to find out how we can help you.