One broker has told Mortgage Introducer that he had been dealing with several cases recently where the proposed mortgage term would extend into the normal retirement age of the client concerned.
The lenders he had been dealing with requested pension projections and the broker explained, with reference to the circumstances of the case, why this would not be available and how the client intended to meet their mortgage repayments but the lenders refused to budge on the matter.
The broker believes some lenders are extremely inflexible on this and are being overly cautious in establishing affordability.
He said: “This is not a complianceissue as the lenders are clearly taking this approach to establish with the FSA that they’re acting in compliance with the rules.
“However, these practices are creating problems for people trying to take out a mortgage past their normal retirement age.”
Brokers are concerned this issue could become more pertinent in the future, as the average age of first-time buyers gets older.
Sole broker Roy New said he has encountered the same problem with lenders. “Lenders are increasingly asking for more proof of the client’s ability to pay the mortgage in their retirement.
“If the client needs another ten years or so to pay off the mortgage in their old age, I would source it to particular lenders who are more likely to accept these cases.”
Paul Fincham, spokesman at Halifax, said: “We would look for details on how the client will be earning an income in their retirement, which is only right. But we are quite flexible on age.
“We have a specific product to help people buy a home in their older years and the maximum age on this is 55. The key concern though is affordability.”
