Ideally, we’d all be debt free by the time we’re nearing retirement, but circumstances can conspire against us.

An email I received today from a woman of 60 says: “I have had a mortgage in the past but sold my property and moved in with my husband. I now wish to obtain a property of my own.”

She earns £24,000 a year in a new job and wants to know how long she will need to work before she can apply for a mortgage and what length of repayment period she can expect to get.

She adds: “Do you have any information on buying/renting 50/50 with a housing association?”

The answer is that nowadays it’s perfectly possible to get a mortgage at 60-plus provided you have a reasonable income – which she does.

Lenders will want to see proof of salary, and in her case, if she starts applying now, it will help to show evidence of earnings in the recent past.

They’ll also want to know that she’ll have sufficient pension income to cover the repayments when she stops working.

If, for any reason, she can’t provide this evidence and they’re unwilling to lend at their best rates – which start at about 5.5 per cent for discounted variable rates and 5.75 per cent for fixes – they may be willing to give her a self-certification loan.

However, these are more expensive – rates start at about 6.25 per cent – because of the added risk involved for the lender in taking the borrower’s word about their financial situation.

Alternatively, offering a relative or friend to act as a guarantor will encourage them to consider her.

The key to getting a good deal, though, is to use a decent independent mortgage broker.

Only an independent professional can scour the entire market on your behalf – that’s why no borrower should simply head to their own bank or building society.

As for the mortgage term, about 40 lenders will take on borrowers of 60-plus and a couple will even consider the over 80s.

This means that, in theory, this lady could get a 20-year term, but going only to those that would allow a debt to continue to such an advanced age would seriously limit her choice.

To ensure a reasonable choice of lenders and deals, a borrower of this age should ask for the minimum term they can possibly afford.

Offering to repay the debt over ten years, for example, would give about 20 to choose from, including some of the biggest names.

A part-purchase, part-rental deal with a housing association can be a good way to cut costs at any age, and there is plenty of information on these on the internet.

This entry was posted on Saturday, July 21st, 2007 at 1:21 pm and is filed under UK Mortgages, UK Personal Finance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.