Generally, getting a mortgage if you are self-employed can be a little more complex than for someone in a traditional employed role. However, if you are self-employed and over the age of 65, making changes to an existing mortgage can be particularly challenging if you are approaching lenders on your own.
Firstly, it is helpful to understand what lenders will consider if you are beyond the usual retirement age, are self-employed and want to extend your mortgage.
Some lenders view self-employment as carrying greater risk because income can appear less predictable or consistent. This is not necessarily the reality, and many of Enness’ clients are self-employed individuals with significant assets, businesses and revenue. If this applies to you, presenting the strength of your overall financial position to lenders upfront can be important when making your case.
Many of Enness’ self-employed clients also want to continue working later in life. For many high-net-worth individuals, work is something they are passionate about, and they have no plans to retire or significantly reduce their workload. Many lenders, particularly alternative lenders and private banks, can be receptive to this when it is clearly demonstrated. Continuing to work beyond 70 because you want to and because you remain capable of generating income is very different from continuing to work because you have insufficient assets or income to retire. Understanding this distinction can be important when a lender assesses your application.
Finally, lenders will want to understand why you want to extend your mortgage. It is important not to try to second-guess what a lender considers to be a reasonable reason for extending a mortgage. Instead, be open about your circumstances and explain exactly why you want to extend the term. If your financial position is strong and you have a clear reason for the extension, there may be lenders willing to consider your circumstances.
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Extending A Mortgage Later In Life
How long you want to extend your mortgage for will be an important consideration for lenders. For some lenders, a 15-year extension may not be possible, while others may be able to consider it. Generally, extending for a relatively short period of 6-36 months can be easier than arranging a longer extension, although extensions of five years or more may be possible in certain circumstances.
In the past, it was often difficult to find a mortgage that extended beyond the borrower turning 65, either through its original term or through an extension. As working lives have become longer, some lenders have become more flexible when considering later-life borrowing, although policies still vary between lenders.
Generally, alternative and boutique lenders and private banks can offer greater flexibility than high street banks, although some high street lenders, particularly building societies, will also consider older borrowers.
Before extending a mortgage, it is essential to understand the financial implications and ensure that you can comfortably afford the repayments. Your age should form part of this consideration. As you get older, your circumstances may change, and you may eventually want to reduce your workload or stop working altogether. It is therefore important to consider whether you could continue to meet your mortgage commitments if you decide to work fewer hours or retire earlier than expected.
Finances
If you want to extend your mortgage later in life, lenders will look carefully at your income and wider financial position. This may include the salary you derive from your business, as well as assets, investments and dividends that generate income. As always, lenders will want to understand how you plan to meet your monthly repayments and how sustainable your income is, while ensuring that the mortgage remains affordable.
Contact Enness
Enness regularly works with borrowers with more complex circumstances, including self-employed individuals and those looking to extend a mortgage later in life. If you are considering a similar situation and would like to understand more about the options available to you, speak to a mortgage specialist.
