Older Peoples Shared Ownership scheme – Help to buy – Mortgages and Equity Release
If you think you are too old to buy a new home or get a mortgage then you may well be wrong as the markets have moved and changed for the better for ‘older’ people.
Why is this?
Lenders have recognised market changes and now products are available which no longer impose retirement age upper age limits accepting that mortgages may need to extend beyond the borrower’s retirement date.
First time buyers are not necessarily as young as they may have been in years gone by and many borrowers may also be approaching retirement with interest only mortgages which they cannot pay off.
Lenders are now appreciating that retirement income may be securer than employment income, and that retirees are better at budgeting, a lower credit risk, and generally may be a lower risk all round.
Looking for a mortgage?
Age is not a bar to buying a home or obtaining a mortgage. Mortgages are available from high street lenders with upper age limits of 80/85. There are now more products available termed as ‘later life’ or ‘long term’.
Equity Release Mortgages
If you already own your home, these specialist mortgages are geared to the release of trapped equity to provide a capital sum to the home owner- with interest rolled up to when the property is sold.
These have been regularly taken up by older people however in practice they can be difficult to transfer if the owner wishes to move. Any proposed borrower looking at this option should now be made aware that there are other options which may represent better value and more flexibility long term, and take advice from a mortgage adviser.
Help to Buy
Available on new homes, this scheme is not just aimed at first time buyers nor just the young. To be eligible you need to be able to have the cash for a five per cent deposit of the value of the new home and to raise a mortgage of 75 per cent. The scheme then provides a 20 per cent equity loan (40 per cent in London). So providing you have income to get a mortgage and cash to cover the deposit, you can buy under this scheme.
Older Peoples Shared Ownership Scheme
This is aimed at enabling those aged over 55 to have the security of their own home when they could not otherwise afford to buy and have a household income of less than £80,000 (£90,000 in London). The buyer acquires a share of up to 75 per cent and pays a subsidised rent on the non-owned share. Further shares can be bought but the maximum is 75 per cent. The property has to be the buyer’s only home so any existing property would have to be sold.
If you have any questions or concerns about your conveyancing please contact Wards Solicitors’ Conveyancing team.