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Can you get a mortgage if your on a work pension ?

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  • 22-01-2015 8:52pm
    #1
    Rebel1977
    Registered Users Posts: 802 ✭✭✭


    Uncle of mine is in his mid 50s seeking to apply for a small mortgage he is not working any more he is on a pensionfrom work.

    can he still qualify for a mortgage as he is not working even though the pension is guaranteed income ?


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    #2
    coylemj
    Registered Users Posts: 25,437 ✭✭✭✭coylemj


    His pension is only 'guaranteed' for as long as he is alive. Like everyone else, in order to get a mortgage he will need to take out a life policy to cover the outstanding debt if he should die during the term of the loan and he may find that the cost of this is prohibitive.

    Before you say that he has no dependants, the banks don't want any messing with probate or executors so as far as they are concerned, if the borrower dies during the term of the loan they want a cheque from a life assurance company and they close the loan.


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    #3
    Henry Ford III
    Moderators, Business & Finance Moderators Posts: 17,711 Mod ✭✭✭✭Henry Ford III


    Life assurance isn't mandatory when the borrower is over 50.


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    #4
    coylemj
    Registered Users Posts: 25,437 ✭✭✭✭coylemj


    Henry Ford III wrote: »
    Life assurance isn't mandatory when the borrower is over 50.

    So if a 51 year old with a wife and kids borrows money to buy a house, the bank will lend him the money with no mortgage protection policy?

    Surely the requirement (for an MPP) is even more obvious if the borrower is over 50?


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    #5
    phormium
    Registered Users Posts: 3,340 ✭✭✭phormium


    The life cover issue will depend on the individual bank's policies, some allow a waiver which is allowable for someone over 50, some don't. A single 50 yr with no dependants has a better chance of getting a waiver than a sole breadwinner with dependant children for example.

    He will be limited on term to probably 65 but other than that it's well worth a try assuming the income is sufficient for bank underwriting criteria.

    If he is unsuccessful try a credit union, will cost more but might be worth it.


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    #6
    Henry Ford III
    Moderators, Business & Finance Moderators Posts: 17,711 Mod ✭✭✭✭Henry Ford III


    coylemj wrote: »
    So if a 51 year old with a wife and kids borrows money to buy a house, the bank will lend him the money with no mortgage protection policy?

    Surely the requirement (for an MPP) is even more obvious if the borrower is over 50?

    Yes. I'm merely quoting the rules, and not justifying them.


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