Straight off the bat The answer is yes you can get a loan in the event that you're over 40. However, it is contingent on your personal circumstances.

If the term of your mortgage extends in blue world city islamabad beyond the age you plan to retire and you are not sure of your retirement age, the lender might require you to submit the projected pension income.

A recent study conducted by the Nottingham Building Society has suggested that almost half of the Mortgage Brokers they interviewed had seen a spike in rejected Mortgage applications from clients aged 40 and over. When they directly asked customers between the ages of 45 to 54 who were declined in the past two years, they said it was down to their age.

WHY IS THIS HAPPENING AND WHAT CAN BE DONE?

Let's reverse the clock to a little. Before the advent of computers for credit scoring, and before the levels of regulation that we have today. If you came to your local Building Society seeking a mortgage and were to be interviewed by your Branch Manager or Mortgage Advisor. They would look at your personal circumstances, including how well you've managed your account. Based on this information decide if your application was accepted. If it is approved, you'll be informed about the amount you are able to borrow, typically expressed as a percentage of your annual salary.

However, these income multipliers didn't account for the age. Thus, whether you were 30 or 50 years old you could get the same amount. This may sound fair, but when both parties were set to retire at 65 years old, this would result in different consequences for both of them. Let's consider an example with PS70,000 (capital and interest) mortgage, with an interest rate of 5%

* 30 year old - Mortgage term of 35 years PS252pm approx.

* 50 years old - fifteen years term for mortgage PS395pm approximately

In this scenario, we have two identical earners who have the same mortgage debt however, the amount paid by applicant two is considerably higher. In the event that the mortgage rates jumped, the likelihood of arrears , or repossession, occurring is higher. This is the reason why modern mortgage calculators take into account the maximum duration for the loan (i.e. you grow older) as well as your income and expenditure.

RETIREMENT AGE

We are continually reminded we will be working till we are older in order to qualify for State Pensions, but the banks aren't considering this when granting mortgages.

The lenders may consider lending mortgages beyond retirement age but only if you demonstrate that you'll be able to afford the payments after retirement. This could be demonstrated by a letter from your Pension provider that includes a projection of your expected income. However, this can cause some issues since almost everyone reading this is likely to take less income when they reach retirement. Therefore, the Lenders will want you to show that you're still able to cover your mortgage from that reduced income. In reality, this seldom is the case unless you need only an extremely small amount of money and in that case, it is unlikely that you will have to extend the mortgage to the point of retirement.

You might recall that the default retirement age was abolished in 2011, meaning that employers are no longer able to require you to retire. As a result, fewer lenders are using the State retirement age as the minimum age you need to have your mortgage paid off, and more allow people to self-declare the age at which they intend to retire.

In terms of things you can do if you find yourself in this circumstance You must be prepared to be questioned on how you'll pay for your mortgage in the future. Be aware that these regulations have been put in place to protect consumers and encourage prudent lending. If you require the loan term to extend over your state retirement age you will need to demonstrate how you will be able to pay the mortgage and show the evidence when asked.