Longer Mortgage Terms For First-Time Buyers
Mon 15 Aug 2016
LONGER MORTGAGE TERMS
A borrower’s age must also be taken into consideration. Maximum age caps vary between lenders, but most will require the mortgage to be repaid by 70 or 75, and borrowers will have to provide detailed proof that they have adequate income going into retirement, which can be difficult to provide. This means that the availability of 35 to 40 year mortgage terms is often limited to younger first or second time buyers.
In reality, most borrowers don’t keep the same mortgage for the whole term. When a fixed or variable period comes to an end, remortgaging presents the opportunity to review the term and perhaps shorten it if higher monthly payments are affordable. Securing a more competitive interest rate may even mean the term can be lowered without increasing payments.
Most lenders also allow borrowers to overpay, which is another chance to reduce the overall amount of interest paid. This can be done regularly or on a more ad-hoc basis if more flexibility is needed.
To view the full article, please visit the Guild of Professional Estate Agents website.