What are the property borrowing options for older people?
A July 2017 report on The i’s website highlighted the difficulties older people often face in borrowing money to finance property purchases.
The newspaper looked at the case of an 83-year-old woman who wanted to purchase a £200,000 house. She had savings of £170,000, but wanted a loan for the rest of the purchase price (£30,000), which she could repay after she sold her existing house.
She could apply for a mortgage to cover the £30,000, but many building societies have an upper age limit of 80 for people applying for a loan. Some banks will lend money to elderly people in the form of a personal loan, but generally, they have an upper loan value limit of £25,000.
Bridging lenders do not normally have an upper age limit for borrowers. They focus on the risk assessment for the property deal. The bridging loan could be repaid after the sale of her existing house. If her house sold quickly, the loan can be repaid without incurring too much interest.
Bridging loans are short-term loans, but if there was a delay in selling her house, she would need to keep the lender informed and may have to renegotiate the terms of the bridging loan.
The article revealed that age is not necessarily a barrier to financing a house purchase. A mortgage and bridging finance broker can advise older borrowers on their best options and find the best loan deals to suit a person’s individual requirements.