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Advice for buying a home in your 40s

Feb 16, 2018
Advice for buying a home in your 40s

Key Takeaways

1. Get Your Current Home Valued: Determine the equity in your current property and its potential selling price. This helps set a realistic budget for your next home.
 
2. Consider Mortgage Options: Speak to a mortgage adviser to explore suitable mortgage deals. If you’re purchasing a new build, consult a new homes mortgage adviser for specialized advice.
 
3. Boost Your Mortgage Chances: Manage your finances well, pay off debts, and maintain a good credit score. Lenders assess your financial stability before approving a mortgage.
 
4. Understand New Build Conveyancing: Buying a new build involves unique legal processes. Ensure you find a reliable conveyancing solicitor to oversee the purchase.

5. Reservation Fees: When making an offer or agreeing to a sale, you may need to pay a reservation fee to secure the new build home. Check the terms carefully.
 
6. Stamp Duty: Use a stamp duty calculator to estimate the tax liability based on the property price and your circumstances.
 
If you’re wanting to move home in 2018, you’ll be pleased to know that London property prices have stalled. This could make moving up the property ladder easier.
 

Get your current home valued

How much equity do you have in your property? How much would it sell for if you put it on the market today? Knowing this information could help you decide on a realistic price range for your next home, saving your valuable time later on. Without an accurate valuation of your current home, you could end up disappointed if you fall in love with a property you can’t afford.
 
Getting a few high street estate agents to give their opinion can be useful, but you don’t have to commit to selling with them. You may want to consider selling with an online estate agent to save money or opting for part-exchange if available.
 

You don’t have to go it alone

Most mortgages are portable but you may want to see if there is a better mortgage deal available. If you’d like professional help you can turn to a mortgage adviser. They can talk you through the different options available, tell you how much you should be able to borrow and make the process of buying a home much easier for you.
 
If you want to purchase a new build, you’ll benefit from speaking to a new homes mortgage adviser (NHMA) as they can provide specialist advice and explain the different incentives on offer. Mortgage advisers have an in-depth knowledge of the mortgage market and can find the right deal to suit your requirements from across the market.
 

Boost your mortgage chances

At least six months before you remortgage you’ll want to make sure that your finances are looking good. You should stay out of your overdraft, pay off any debts and cut unnecessary spending. Mortgage providers want to see that you can manage your money well and need to be confident that you can comfortably afford your mortgage payments every month without fail.
 
It’s worth checking what information the credit reference agencies hold on you as once you make a new mortgage application, your chosen mortgage provider will calculate a credit score based on your credit history information, income and outgoings. The higher your credit score the more likely you’ll be accepted for the mortgage you’ve applied for. Any payments that you’ve missed or defaulted on will show on your credit history for seven years, as will details of any bankruptcies, CCJs, IVAs or other debt solution. Your credit history will also provide details of your credit accounts, any previous application searches and whether you’re financially linked to someone.
 
It’s a good idea to close down any inactive accounts as mortgage providers look at how much available credit you have when deciding on the amount you can borrow. If there are any mistakes on your file or you’d like to apply for a notice of disassociation, to stop the credit history of someone you’ve previously shared a financial product with from impacting on your credit history, you should contact each of the credit reference agencies.
 

Challenges of buying in your 40s

In your 40s you might not be able to get a mortgage with a term of 30 – 35 years because mortgage providers won’t usually lend beyond your retirement age. However, there are plenty of over 40s mortgages available with terms of 25 years or less. Additionally, your salary should be higher than it was in your 20s and 30s, making you more financially stable and able to manage a shorter mortgage term.
 
Whether you’ll be accepted for a mortgage or not can’t be influenced solely by your age. If you have health limitations, this shouldn’t matter, just as long as you can meet the requirements set by your mortgage provider. The home you choose should ideally suit your needs in the medium to long term and you need to have a clear strategy in place to make sure that you’ll be able to keep up your payments in the years ahead. Especially if you decide to go part-time in the run up to your retirement.
 
Climbing the property ladder is always exciting, especially when it’s in London. It’s an investment in your future happiness and, homes in the capital are always desirable, so should you decide to sell in the future you should be able to do so quickly and at a profit.
 

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