We appreciate that, even later in life, your clients can go through major events such as marriage, divorce and children. That’s why we launched into the later life market to offer our expertise, supported by individual underwriting which is key to reviewing these types of cases. Below are some real-life examples of enquiries we’ve received and how we’ve been able to support them.
Meet Paula & Tom
Paula (56) has been living in her home for over 20 years. She’s currently working as a receptionist earning £18,000 per annum. She’s been dating Tom (64), who’s currently renting, for the last 5 years and they are now engaged to be married. Tom owns his own company and is a director drawing a salary of £42,000 per annum.
Paula would like to do the following:
- Remortgage her current £100,000 mortgage, adding Paul to it
- Borrow an additional £20,000 for home improvements
The property is worth £315,000 so 38% LTV. The clients would like a 10-year term on interest only. Tom also has a SIPP in the background worth £400,000.
What we said:
In this scenario we would insist that Paula sought independent legal advice regarding the transaction. In terms of income, we were able to accept Paula and Tom’s earned income plus 5% of Tom’s SIPP (£20,000). This gave us a total income of £80,000 and there were no issues with affordability. We were able to offer a 10-year term as Tom intended to continue working beyond state retirement age to 75. Due to the nature of his self-employment being IT related, we could accept earned income for this application on an interest only basis with downsizing as the repayment vehicle, as it was an acceptable option due to the minimum equity requirement based on region being met.
Meet Richard
Richard (62) lives in his unencumbered property but is going through a divorce. Staying in his home is important to him so he needs to remortgage to satisfy the divorce settlement. Richard works part-time at a school earning £9,000 per annum but he also has a private pension paying £24,000 per annum. The property is worth £250,000 so Richard needs to borrow £125,000.
What we said:
In this scenario we’re happy to accept the earned income up to age 75 due to the nature of his work, his plans to work beyond state pension age and 100% of his private pension. This gave us a total income of £33,000 so the case fit income multiples. As Richard’s outgoings were minimal, we had no issues around affordability. The reason for capital raising was acceptable to us so we were able to offer a 13-year term on interest only.
Got a case in mind?
Contact the Marsden’s Product and Intermediary Account Manager, Katie Broome, or call their Broker Support Team on 01282 440583*.
