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Mortgages for pensioners


Albert the InfoGipsy
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I'm looking at the possibility of taking out a mortgage in France in a year or two. I know that the main thing they are interested in is 'ability to pay' and so the paymentsare restricted to (I  think) 30% of your income, presumably with some other criteria. Therefore the size of the loan will be restricted.

Each time I took out a mortgage in the UK they limited the duration to prevent it running beyond my state pension date, on the theory that I'd retire then and only have a pittance coming in.

What I don't know is how all this works for pensioners in France. Let's assume total pension income of €20,000 (nice, easy number) and a couple of pensioners aged 65 (him) and 63 (her).  That means that they could pay €6,000 a year. How long a mortgage can they get? 10 years? 20?

 

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We took out our mortgage 5 years ago when MrR51 was 55 - we were allowed a repayment term up to his 70th birthday latest even though he he planned to retire at 60 and would be eligible for his (UK) state pension at 65.  We are currently both UK resident but it's probable that we will stay that way [:)]

Mrs R51

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Well yes, I can remember the bad old days when my UK mortgage went up every week it seemed and having to find the extra money was hard. Now if it goes up , it will take longer to pay off and less if it goes down, but at least  my repayments are static every month which is better for me.
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[quote user="Gardener"]Well yes, I can remember the bad old days when my UK mortgage went up every week it seemed and having to find the extra money was hard. Now if it goes up , it will take longer to pay off and less if it goes down, but at least  my repayments are static every month which is better for me.[/quote]

The extra cost of extending our mortgage in this way was something that terrified us, having done the sums. We increased the monthly repayment when necessary but never reduced when rates fell. We never put ourselves in a position where we were so stretched that an increase was a disaster though if we had borrowed as much as they wanted to lend us we would have been.

John

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Albert - I saw a recent TV programme about the difficulties for pensioners to obtain any kind of mortgage or loan these days - regardless of their ability to pay on paper. This sort of discrimination has increased so much that it also includes older people who want to rent - I can't quite understand how they are judged to be "bad security", but it seems they are. So I hope you get all the right information, in case this is proving to be an obstacle for you when the time comes (unlike in the UK where older people are routinely considered for loans or mortgage).

Apparently, the HALDE  (Haute Autorité de Lutte contre les Discriminations et pour l'Egalité) has to deal with a lot of such cases these days.

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[quote user="5-element"]

Albert - I saw a recent TV programme about the difficulties for pensioners to obtain any kind of mortgage or loan these days - regardless of their ability to pay on paper. This sort of discrimination has increased so much that it also includes older people who want to rent - I can't quite understand how they are judged to be "bad security", but it seems they are. So I hope you get all the right information, in case this is proving to be an obstacle for you when the time comes (unlike in the UK where older people are routinely considered for loans or mortgage).

Apparently, the HALDE  (Haute Autorité de Lutte contre les Discriminations et pour l'Egalité) has to deal with a lot of such cases these days.

[/quote]Humph.  The fact that we all live so much longer is continually cited as a reason for having to raise the pensionable age.  So typical that this argument evaporates when we want something in return.
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I wish I could remember what the exact programme was, as it showed people in their early sixties who were very stuck - one particular woman who couldn't move out of her elderly mother's flat as she did not have enough to buy a flat without borrowing some money, and was unable to rent because the landlords did not want any retired person!

But i found this (from Nov.2009) which at least, alludes to the fact - although it focuses more on over 75:

http://videos.tf1.fr/jt-13h/les-seniors-juges-trop-vieux-pour-emprunter-5535389.html

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I'll be honest 5E my wife won't rent to over 60s. The law is just too restrictive on the landlord(lady in this case). So we end up actively discrimating against anyone over retirement age. It's not the fault of the age group, but the law.

My speciality is not consumer finance, but corporate finance. However, from the position of a lender, one consideration I take, is the status of the borrower in respect of media/political interest. I would be very nervous about lending to an OAP. Specifically, if the asset had to be repossessed due to none payment, what would be the media, or political, reaction? Very negative to my company would be the assumption. Therefore steer clear. Similarly, steer clear of lending to charities, to old peoples homes, to anything which potentially could generate negative publicity. Unfortunately it is the way the world works. I know how the DM/DT writes it's stories, so blame them and their ilk around Europe.

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cooperlola, it is our children and grandchildren who are forecast to live much longer, unfortunately not necessarily the existing older generation!

When they mention on the news that an average man or women is now expected to live to a certain age, they fail to mention that this is for someone born now.

The reason why the same extension to life expectancy does not apply to all adults, is that the older you are the more likely you will have been exposed to mad cow disease, higher pollution levels, dangerous insecticides, food additives, chemicals, asbestos, unscreened blood, all now prohibited, that can have a bearing on illness in later life. The sad reality is that one in five people die before State retirement age in the UK at the moment.
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Welcome to the the Second Class Non Citizens Club, Albert!  Subscription Form in the post and don't hesitate to ask if you find it a bit difficult to understand or to fill in!  Okey-Dokey, then?

PS:  Why do they have to adopt that special, bright voice and speak to you as though you are deaf and have totally lost your marbles?

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  • 3 weeks later...

Our problem Albert is that we were allowed to take out a bridging loan and now they have given us just 6 weeks to find the 66.000 euros, then they repossess.  The loan isn't up until beginning of December.  The bank has said they won't convert to a mortgage even though I still have another 4 years to go to 70 and could pay. 

 

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[quote user="Aussie"]

Our problem Albert is that we were allowed to take out a bridging loan and now they have given us just 6 weeks to find the 66.000 euros, then they repossess.  The loan isn't up until beginning of December.  The bank has said they won't convert to a mortgage even though I still have another 4 years to go to 70 and could pay. 

[/quote]Sorry to hear of your dilemma.

I'm guessing that you maybe took out a Prêt Relais bridging loan which apparently is commonly converted to a mortgage but maybe your age is against you.

Even though you say redemption isn't due until December as with any loan a demand for repayment can be made at any time, not just at term end, and if they know or suspect that you will not be able to repay they will likely be putting the procedures in place so that repossession, and God forbid it comes to that, can be executed promptly in case of default.

Bonne chance

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