Yes, you can get a mortgage in Hull if you are age 40 or older, subject to passing a lender’s credit scoring and affordability calculations. In most cases, the process can be quite straightforward too.
The process can work differently depending on what you are looking to achieve with your mortgage. Lenders will also look at a variety of factors before accepting your mortgage application.
If you are over 40 and are looking for your first mortgage, lenders will be cautious of your mortgage term. They will look at how old you will be at the end of your mortgage term, in this case, you will be around 65-70 years old based on a typical 25-30 year term.
How much you can borrow for a mortgage is determined by your income. Lenders will look at the realistic amount that you can borrow based on your age and salary. When assessing your income, lenders will generally expect your wage to be higher than those who are looking for their first home in their 20s. Having a higher income may allow you to borrow more.
As you become older, statistically you are more susceptible to illness. From a lender’s perspective, this creates more risk when lending and will be factored in when calculating your maximum age for borrowing.
The main factors that lenders will look at when determining whether you can get a mortgage over 40 are age, income/expenditure and your retirement age. Some lenders will allow the mortgage term to extend over your retirement age if you are able to continue working. This will vary from lender to lender and also on your job type.
So, if you are a first time buyer in Hull and are over 40, you need to be aware of some of the factors that lenders will assess before accepting your mortgage application.
Loan to value is the ratio of what you are borrowing for a mortgage to the value of the property you are taking out the mortgage on. For example, if you provide a 5% deposit on a property, you are taking out a 95% loan to value mortgage.
The lower your loan to value is, you may have access to more competitive deals. If you can reduce this loan to value percentage by providing a higher deposit then your term and payments may reduce.
Your deposit could come from a variety of sources, such as your savings, gifted deposit, or in some cases through inheritance. As a mortgage broker in Hull, we have seen parents release equity from their homes in order to gift a deposit to their children.
If you have an existing mortgage on your current property, and you are looking to move home in Hull, you should see whether your mortgage is portable to your new property. Alternatively, if this is not possible or is a more expensive option, you could look at a new mortgage.
If you are looking at moving home in Hull to a bigger property, this generally means that you would be looking to borrow more. Lenders will reassess your affordability when deciding whether or not you can get a mortgage on your new home.
Furthermore, there may be other contributing factors that could affect your affordability assessment when looking for a new mortgage, such as credit score, existing credit commitments, number of dependents or salary increases. Your mortgage advisor in Hull will run through these factors with you prior to submitting your mortgage application.
When it comes to downsizing and moving home in Hull, the amount of equity that you have built up in your current property will be a big contributing factor to your deposit. We have seen that some applicants choose to use all of this equity for their deposit, whereas, others may only use a proportion. As mentioned above, sometimes the remaining equity is gifted to children/family members for their mortgage deposit.
Depending on your equity and the level of downsizing, in some cases, you may able to purchase the property outright and not require a mortgage. As a mortgage broker in Hull, we have seen that in most instances, customers at the age of 40 have not built up enough equity within their current home to purchase their new property outright. This is because they will have likely only held their mortgage for 15-20 years.
Buy to let mortgages usually require at least a 25% deposit, but can sometimes stretch up to 40%. Depending on the lender, some will look at your own personal income and take this into account. Whilst others will look solely at the potential rental income that the property could generate.
If you have any questions about getting a mortgage when you are over 40, make sure to get in touch with our team. We would love to answer your questions and help when and where we can.
Last edited 28/03/2023