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Mortgage Advisor & Director
Can I get a mortgage to buy a retirement property?
Yes! While it may be more of a challenge to get a mortgage to buy a retirement property, there are specialist lenders in the market.
As a whole-of-market lender, at Teito, our team of experienced advisors have helped many people like you to get the best deal available on their new retirement home. Complete our online form today to start the process, or keep reading to learn more about getting a mortgage to buy a retirement property.
What is a retirement property?
Modern, purpose-built retirement homes tend to be set out as a complex or village-style setting, specifically for those over 55. Many retirement properties benefit from shared amenities, including swimming pools and gardens, and provide a programme of social activities for residents.
Although they are designed for use by older people, you can be any age to buy a retirement property, with younger families often buying them for their parents.
What are the benefits of buying a retirement property?
Whether you are close to retiring or a few years in, you may feel the time is right to sell your home and buy a dedicated retirement home.
Retirement properties can provide a safe, secure place to relax and make new friends. Purpose-built homes can offer additional features designed to make your life easier as you age; for example, plug sockets further up the wall and emergency pull-cords.
If you are downsizing from the family home, you will find your bills are lower, and with organised activities close by you are more likely to have an active social life.
Other things to consider when buying a retirement property
Assuming you are buying a home in a dedicated retirement complex, the property is likely to be sold on a leasehold basis.
This means that you are buying the right to live in the property for the period of the lease. The longer the lease, the better. On leasehold properties, there is typically a nominal ground rent to cover; however, for retirement properties, there are likely to be other charges incurred depending on the nature of the agreement.
There is generally a service agreement to cover the cost of shared amenities and maintenance of communal areas, charged annually. Make sure you understand what is included and excluded from the service agreement so you can make provision.
There may be additional options such as medical care, meals or onsite activities to pay for.
What are the difficulties in getting a retirement mortgage?
Many mainstream lenders will not consider applicants over a certain age, or specify a fixed age by which the mortgage must be repaid.
You will be pleased to hear that there are specialist lenders who will extend their mortgage provision to older people, and our advisors can help.
There are two other reasons related to the property why some lenders shy away from retirement properties:
- Most retirement properties are leasehold, which can cause problems with some lenders.
- As the market for retirement properties is less mainstream than standard housing, there is less potential for resale, which is another concern for lenders.
How can I learn more?
Our team of experienced advisors are ready for you to get in touch, complete our simple online form now to get the process started.
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Choosing an Adviser
Selecting a qualified and experienced mortgage adviser is of great importance. To choose a suitable adviser, evaluate their qualifications, experience, and reputation, and ensure they are regulated by the Financial Conduct Authority (FCA).
Read reviews from previous clients and make sure they provide a clear explanation of the products and services they offer, as well as the fees and charges associated with them.