Property Finance for Seniors Downsizing Prior to Pension Phase

Please advise of any specialist finance groups that work for Seniors in the 60 to 67 age group who are not entirely out of workforce, whether part time, self employed part time, or combination with one spouse on a salary.

Many of us are in the phase of less hours of work but with super in the pipeline and savings whether large or small.

We are treated as non persons by the main stream criteria and generally avoided I have found. Possibly because we are rated highly as dead within a set 20 year of life statistic table.

Banks would rather lend to a 20 year old with no assets and a good job, as against a senior loaded up with assets with a winding down job. No doubt Govt. Legislation on Lending stuffed up a lot of Seniors plans for investment.

In brief, if I wanted to downsize to smaller property before the pension age, are there Finance operators who will lend small amounts (50,000 to 100,000 under housing mortgage security) at Housing Finance Rates to Seniors. 50000 is a very low weekly payment but helps a senior get a more comfortable home.

 

There are plenty of lenders that will help with this as long as the deal is explained properly and the lender can see there’s a clear exit strategy. Usually this is simply showing there’s enough in super to pay out the debt at retirement - actually paying out the loan at this point is not required.

 

You will have to over come 2 issues
1. income, especially if transitioning to retirement
2. Shorter loan terms with many lenders or an exit strategy. Lenders will want to know how you will pay off the loan before you hit 70 or 75

 

That has NOT been my experience.

I am nearly 62, retired when I was 55 and have borrowed more money in retirement than when I was working.

One just needs to submit a robust business case showing evidence of assets/liabilities (before and after new purchase), income/expenses (before and after new purchase) and a clear exit strategy aligned to a timeline.

My applications have always been accepted.

 

It's still possible to borrow if you're 60+, there is just slightly different criteria which revolves around exit strategy, loan terms, ability to repay down debt at a potentially accelerated rate. In the end the lenders are being dictated to by the regulators to ensure loans are suitable, so they need to ensure the arguably most vulnerable to poor advice (retirees or those near it) are not put into a situation which heavily impacts their living standards for the rest of their lives.

 

It's not been my observation that people who are older are treated any worse than young people by lenders but it does make sense that banks are looking at anyone's ability to pay.

As for down sizing, why not sell and then buy? Unless there is not property to sell? Sounds like you have assets that can be sold.

 

A family member of mine sells a lot of downsizer/retirees homes as a niche (really odd how he's managed to get a following in that market) - for those who cannot qualify for bridging facilities they will otherwise work with simultaneous settlements or leaseback sale arrangements. So long as you're not leveraged to the hilt I find for the most part there is a solution to most peoples problems in this space.

 

Yes, that makes sense to me. Simultaneous settlement is probably the least risky for some one who is asset rich.

 

It’s about avoiding a current affair headline, “ruthless lender evicts pensioner”.

 

Or “unscrupulous lender gives 67 year old a 30 year loan term”.

Of course no mention that the 67 year old has an on-going income not reliant on employment!!

 

Recent two examples in 2 weeks major banks have refused working people any loan increase based on age and risk of stopping work.

Brokers got involved and all ok