Mortgage in retirement

[CAH706]

Hi all

Anyone have a advice or experience of the following

I’ve recently retired, wife still working and is planning to do for some time yet

We are considering moving and it’s likely the houses we will be looking at will be a little more expensive than our current property which has a mortgage on it

Depending on the price uplift we will either keep the mortgage at the current level and term ( my wife’s salary is enough to get the mortgage on her own as it less than 2 times her salary) and use savings plus possibly some of my tax free allowance.

Question - if we wanted to use my pension to support the mortgage what’s does the bank need to see to allow that. I have a reasonably sized pension pot but so far have not needed to use it so there us no pension withdrawal each month etc

Thanks all

[LeoSayer]

Recent thread:

https://www.pistonheads.com/gassing/topic.asp?h=0&...

[Sarnie]

CAH706 said:

Hi all

Anyone have a advice or experience of the following

I’ve recently retired, wife still working and is planning to do for some time yet

We are considering moving and it’s likely the houses we will be looking at will be a little more expensive than our current property which has a mortgage on it

Depending on the price uplift we will either keep the mortgage at the current level and term ( my wife’s salary is enough to get the mortgage on her own as it less than 2 times her salary) and use savings plus possibly some of my tax free allowance.

Question - if we wanted to use my pension to support the mortgage what’s does the bank need to see to allow that. I have a reasonably sized pension pot but so far have not needed to use it so there us no pension withdrawal each month etc

Thanks all

You can't use a Pension to support a mortgage application if there is no monthly draw down from it.

[98elise]

Sarnie said:

CAH706 said:

Hi all

Anyone have a advice or experience of the following

I’ve recently retired, wife still working and is planning to do for some time yet

We are considering moving and it’s likely the houses we will be looking at will be a little more expensive than our current property which has a mortgage on it

Depending on the price uplift we will either keep the mortgage at the current level and term ( my wife’s salary is enough to get the mortgage on her own as it less than 2 times her salary) and use savings plus possibly some of my tax free allowance.

Question - if we wanted to use my pension to support the mortgage what’s does the bank need to see to allow that. I have a reasonably sized pension pot but so far have not needed to use it so there us no pension withdrawal each month etc

Thanks all

You can't use a Pension to support a mortgage application if there is no monthly draw down from it.

Is that true? I'm currently applying for a remortgage and have recently retired. I've taken my 25% lump sum and have no need to draw down yet. My advisor didn't think it would be a problem.

[gfreeman]

In the middle of moving at the moment. I am retired with wife still earning. We are lucky that we have 2 properties - my house for the last 18 years mortgage free and a doer upper we bought using a bit of my savings, the wife’s divorce settlement and a small mortgage in my name.
My house is nearly sold - exchanged with Completion next Tuesday.
We are buying a larger house using funds from my house sale, my 25% tax free allowance from my pension pot (pension pot never previously touched) and a small inheritance from my Dad’s estate.
We also need a small mortgage - Mortgage company said it is a lot easier for working wife to borrow the funds due to my age (old git). She also has to pay off the outstanding balance on the existing mortgage as they will not lend against two properties in the normal domestic situation.
I transferred all my funds from various savings into one account (in person at the building society armed with passport etc...). The solicitor will hold proceeds of sale.
I had to sign a Gifting form for the building society giving proof of funds (photo of statement) and ditto for the solicitor, together with a statement of proceeds from Dads’s estate. (Nosey b******d’s)

You obviously need to trust your wife! No-one even mentioned or asked about lump from pension.

[Sarnie]

98elise said:

Is that true? I'm currently applying for a remortgage and have recently retired. I've taken my 25% lump sum and have no need to draw down yet. My advisor didn't think it would be a problem.

It can't be used for affordability if there is no monthly drawdown from the Pension.

[98elise]

Sarnie said:

98elise said:

Is that true? I'm currently applying for a remortgage and have recently retired. I've taken my 25% lump sum and have no need to draw down yet. My advisor didn't think it would be a problem.

It can't be used for affordability if there is no monthly drawdown from the Pension.

Cheers. He's not got back to me on the residential mortgage yet (it's not due for a few months), but has sorted out my BTL's.

I might need to start some drawdown then. I was planning to do an annual lump close to the end of the tax year to use up my 20% tax band.

It's highly likely to be with the same provider but with a different product if that makes a difference? I'm planning to drop the offset and go to a normal fixed rate.

[Sarnie]

98elise said:

Cheers. He's not got back to me on the residential mortgage yet (it's not due for a few months), but has sorted out my BTL's.

I might need to start some drawdown then. I was planning to do an annual lump close to the end of the tax year to use up my 20% tax band.

It's highly likely to be with the same provider but with a different product if that makes a difference? I'm planning to drop the offset and go to a normal fixed rate.

It's near impossible to comment on what you or your advisor are looking to do.

If it's just a transfer to a new rate witht he current lender then nothing will be required at all.

If you request additional lending or need to apply to another lender then you would need to evidence affordability which would require monthly income from your Pension, they won't accept a projection of what it may, or may not, be in the future.

[timberman]

98elise said:

Sarnie said:

98elise said:

Is that true? I'm currently applying for a remortgage and have recently retired. I've taken my 25% lump sum and have no need to draw down yet. My advisor didn't think it would be a problem.

It can't be used for affordability if there is no monthly drawdown from the Pension.

Cheers. He's not got back to me on the residential mortgage yet (it's not due for a few months), but has sorted out my BTL's.

I might need to start some drawdown then. I was planning to do an annual lump close to the end of the tax year to use up my 20% tax band.

It's highly likely to be with the same provider but with a different product if that makes a difference? I'm planning to drop the offset and go to a normal fixed rate.

we're in the same situation, both retired and now looking to move,

was hoping to pay cash, but now due to the housing market going mad we're no longer able to afford anything suitable without getting a mortgage,

we had no intention of setting up a monthly drawdown on our pensions now or at any time in the future.

we still haven't found anything interesting so not even approached anyone regarding mortgages yet and was hoping when we do that they would judge affordability based on the size of our pension pots,

If we were to start taking some drawdown just for the purpose of getting a mortgage and then stopped straight after would they care,
and how long does drawdown need to be running before one should apply?

[CAH706]

Thanks everyone for the advice

Sarnie - thanks for the specific advice. Sounds like I’ll need to use my tax free sum if needed

[98elise]

Sarnie said:

98elise said:

Cheers. He's not got back to me on the residential mortgage yet (it's not due for a few months), but has sorted out my BTL's.

I might need to start some drawdown then. I was planning to do an annual lump close to the end of the tax year to use up my 20% tax band.

It's highly likely to be with the same provider but with a different product if that makes a difference? I'm planning to drop the offset and go to a normal fixed rate.

It's near impossible to comment on what you or your advisor are looking to do.

If it's just a transfer to a new rate witht he current lender then nothing will be required at all.

If you request additional lending or need to apply to another lender then you would need to evidence affordability which would require monthly income from your Pension, they won't accept a projection of what it may, or may not, be in the future.

It's a simple transfer to a new rate at the end of my current deal. My preference was to stay with the current provider as it's simpler.

Sounds like thats why it's ok that I don't have a monthly draw down.

[98elise]

timberman said:

98elise said:

Sarnie said:

98elise said:

Is that true? I'm currently applying for a remortgage and have recently retired. I've taken my 25% lump sum and have no need to draw down yet. My advisor didn't think it would be a problem.

It can't be used for affordability if there is no monthly drawdown from the Pension.

Cheers. He's not got back to me on the residential mortgage yet (it's not due for a few months), but has sorted out my BTL's.

I might need to start some drawdown then. I was planning to do an annual lump close to the end of the tax year to use up my 20% tax band.

It's highly likely to be with the same provider but with a different product if that makes a difference? I'm planning to drop the offset and go to a normal fixed rate.

we're in the same situation, both retired and now looking to move,

was hoping to pay cash, but now due to the housing market going mad we're no longer able to afford anything suitable without getting a mortgage,

we had no intention of setting up a monthly drawdown on our pensions now or at any time in the future.

we still haven't found anything interesting so not even approached anyone regarding mortgages yet and was hoping when we do that they would judge affordability based on the size of our pension pots,

If we were to start taking some drawdown just for the purpose of getting a mortgage and then stopped straight after would they care,
and how long does drawdown need to be running before one should apply?

I don't think they care as long as you make the payments. Circumstances change, especially as they cover such a large period of your life.

I think my advisor wanted evidence of 3 months payments, but Sarnie is the expert and obviously can give a market view rather than a single instance.

[timberman]

98elise said:

timberman said:

98elise said:

Sarnie said:

98elise said:

Is that true? I'm currently applying for a remortgage and have recently retired. I've taken my 25% lump sum and have no need to draw down yet. My advisor didn't think it would be a problem.

It can't be used for affordability if there is no monthly drawdown from the Pension.

Cheers. He's not got back to me on the residential mortgage yet (it's not due for a few months), but has sorted out my BTL's.

I might need to start some drawdown then. I was planning to do an annual lump close to the end of the tax year to use up my 20% tax band.

It's highly likely to be with the same provider but with a different product if that makes a difference? I'm planning to drop the offset and go to a normal fixed rate.

we're in the same situation, both retired and now looking to move,

was hoping to pay cash, but now due to the housing market going mad we're no longer able to afford anything suitable without getting a mortgage,

we had no intention of setting up a monthly drawdown on our pensions now or at any time in the future.

we still haven't found anything interesting so not even approached anyone regarding mortgages yet and was hoping when we do that they would judge affordability based on the size of our pension pots,

If we were to start taking some drawdown just for the purpose of getting a mortgage and then stopped straight after would they care,
and how long does drawdown need to be running before one should apply?

I don't think they care as long as you make the payments. Circumstances change, especially as they cover such a large period of your life.

I think my advisor wanted evidence of 3 months payments, but Sarnie is the expert and obviously can give a market view rather than a single instance.

yeah that makes sense,
does seem a little odd to me that they would base affordability based on a persons level of drawdown,

do they even look at the size of pension pot,
I mean what's to stop someone setting their monthly drawdown at a level that is totally unrealistic just in order to secure a bigger mortgage.

I suppose going monthly for a short time is something I can live with if it means we stand a better chance of securing the money we'd need in order to find a house we'd actually want to live in.