Equity release could help borrowers rejected by high street lenders
Older borrowers are facing further financial difficulties after West Bromwich Building Society became the latest lender to reduce its maximum age of a borrower.
The building society had previously allowed borrowers up to the age of 80 (by the end of the term) to take out a mortgage, providing they could prove their capability to repay the loan in retirement. However this latest move sees the lender cut its borrower’s age criterion to 70.
This not only impacts homeowners approaching retirement but is likely to have a considerable knock on effect for future generations as the age of first time buyers continues to increase; a person buying a house in their 30s could in fact struggle to remortgage in their 40s.
But while standard mortgages become somewhat out of reach for the older borrower, equity release remains a viable funding option.
Equity release allows a homeowner to release funds from their property whilst retaining the right to live there.
Homeowners have the choice of either receiving their equity in smaller, more regular payments, known as drawdown, or as a one off lump sum, often used to pay off an existing mortgage, clear loan or credit card debts or help a child or grandchildren with a deposit for a property of their own.
Content correct at time of publication