We recommend speaking to a mortgage advisor to find the best retirement interest only mortgage rates, as we can often unlock deals that you wouldn’t be able to find otherwise. Finding the best Retirement Interest Only Mortgage Deal If you’re considering buying a rental property, for example, then you may instead look for a buy to let mortgage for over 60s. A RIO mortgage may not always be the best option for you. How much you can borrow and the RIO mortgage rates on offer to you will depend on the value of your home as well as the lender’s affordability assessment. Most lenders will also have a maximum loan-to-value ratio, which is often around 55% but again, varies between lenders. Most RIO mortgage providers will have an age bracket which you must be within when applying for your mortgage. You should be prepared to show evidence of your income and outgoings when applying for your mortgage. You must also be able to demonstrate that your retirement income can comfortably cover your monthly interest payments and any other outgoings you have. Getting a mortgage on a pension can be trickier than when you’re in work. RIO mortgage criteria vary from lender to lender, but in general, all will require that you have a good credit history and plenty of equity in your property. Retirement Interest Only Mortgage Eligibility Criteria Our expert team is always on hand to help out with any questions you might have. Then, we’ll help you through the application process from start to finish. We’ll also compare retirement interest only mortgages from a range of RIO mortgage providers to ensure you’re getting the best deal on the market. We offer free mortgage advice, and will let you know whether you’re a suitable candidate for mortgages for the over 60s, and what you need to prepare for your mortgage application. Retirement Interest Only Mortgage ProcessĪs with any other type of mortgage, the first step is to speak to a mortgage broker like L&C. However, the capital does need to be repaid when your property is sold, which could reduce the value of any inheritance you want to leave, so you’ll want to weigh up the different options before making your decision. That means it could be a great option if you’re looking for greater financial flexibility in your retirement, as you don’t have to make the larger monthly payments that would apply to a repayment mortgage. This means the interest rolls up over time and must be repaid along with the capital borrowed when you come to sell your home.īecause you only pay the interest every month, payments for a RIO mortgage are usually lower than if you were to repay some of the capital plus the interest. Lifetime mortgages are a type of equity release scheme, where no monthly payments are made. This is something to consider if you’re weighing up a retirement interest only mortgage vs. Capital borrowed is only paid off when the property is sold, usually when the mortgage holder moves into long-term care or dies. Retirement interest only mortgages work in a similar way to a standard interest only mortgage, in that you pay back the interest on your mortgage every month, but with this type of mortgage, there is typically no end date and no age restrictions.
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