Case Study: Age & Debt Issues

Judy and Howard were living in council rented property, and Judy was offered the chance to purchase the home through the Right to Buy scheme. Howard is older than Judy and nearing retirement, however for the purchase to take place he needed to go on the mortgage application to support the affordability.

However, Howard had some previous issues with debt and was subject to a debt management plan (albeit very recently satisfied) and both clients had sporadic defaults on their credit files. To keep the mortgage payments to a lower, more affordable monthly amount, the mortgage needed to be over a longer term and into Howard’s retirement age.

Our solution

This was a complex situation as we needed to find a lender who would be happy with the numerous issues under this application:

  • Settled debt management plans
  • Settled defaults
  • Sole proprietor with a partner supporting the affordability on the mortgage living with them
  • A lender willing to lend into retirement.

Despite all of these issues, we discussed the application with certain lenders who we knew were understanding in these circumstances and sourced a lender who would consider the application and lend the money for Judy to buy the property.

The result

On finding the lender we advised the clients to fix the mortgage rate for five years, as this allows time for the debt management plan and the defaults to drop off the credit file, while keeping mortgage payments static for the foreseeable future.

Having originally been concerned that they’d not be able to borrow the money, Judy and Howard are extremely happy that they now have a place they can call their own.