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Please help, can a 71yr old get a mortgage?
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# 1
Chop
Old 23-11-2009, 2:59 PM
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Unhappy Please help, can a 71yr old get a mortgage?

This is a long and very complex story so I will cut to the bit where I need advice, as I am desperately hoping I may have come up with a solution.

My mum who is nearly 72, disabled and frail is in a financial mess and we can’t find an easy way out. I already give her as much as I can afford to and my brothers have nothing to give. She is in debt that needs clearing and we also need to make repairs to the house, pay solicitors bills (other matters) etc

She owns the property she lives in and has no mortgage. I really don’t want to go down the equity release route but have read that it is not unheard of for pensioners to get mortgages. Say we wanted to take £20k for 5 years on an interest only basis (with the plan to repay the actual £20k when ‘the time comes’ as my puts it and she gives up the fight).

Can a 72yr old get a mortgage? If I were to be her guarantor? Would she be totally screwed on the rate or could we get a reasonable interest only small mortgage?

I really would appreciate any advice as have exhausted all options (including advice from charities, social services, benefits etc). I really don’t care if this eats into the inheritance and leaves a sum to be paid off, I just want to sort the here and now and ease her anxiety – and mine.

Thank you in advance.
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# 2
benjo
Old 23-11-2009, 3:55 PM
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Cutting to the chase, assuming you could get 20k over 5 years - your plan to repy relies on your mothers death, in your own words 'with the plan to repay when the time comes and she gives up the fight'.

What happens if she is fit, strong and healthy in 5 years time, she/you cant repay the 20k, the house is repossessed and your old mum is 77 years old and homeless :confused:.

You dont mention if the debts she has are secured or unsecured, it is generally not a great idea to turn unsecured debts into secured ones. Im sure someone here knows much more than me though.

Goodluck.
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# 3
Chop
Old 23-11-2009, 4:20 PM
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Default Hurts to say it but......

"What happens if she is fit, strong and healthy in 5 years time, she/you cant repay the 20k, the house is repossessed and your old mum is 77 years old and homeless"

Her health is very poor and it's highly unlikely she will make 77, if she did she would have to be in residential care by then. Hence the 5yr plan. Breaks my heart to say it, but there it is.

The debts are unsecured but HUGE APR so monthly repayments are crippling and have to go. Like I say, it's complex and other options all explored - I just need to know if mortgage is a possible route, rather than equity release. I can't have her living with this anxiety (and poverty) any more - it's just not right/fair.
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# 4
zzzLazyDaisy
Old 23-11-2009, 4:25 PM
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It is worth speaking to CCCS about the debt problem. It may be possible for her to come to an arrangement with her creditors to pay just a token payment.

They are very helpful and non-judgmental, it is definitely worth talking it over with them.
I'm a retired employment solicitor. Hopefully some of my comments might be useful, but they are only my opinion and not intended as legal advice.

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# 5
justjohn
Old 23-11-2009, 4:38 PM
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The loans are unsecured.
Her only asset is the house.
Your mum is old and will not get any younger.
If you are being left the house in a will it may be more benifiacial too sign over too you now for various reasons.
If you mum has no assets or has seen too have no assets then the debt will die with her.
Residential care - If this happens and your mum has assets then they will be used to help pay for care.

This is my understanding of it. someone may correct me if i am wrong.

You mum and and you need to think carefully on this.
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# 6
hoggums
Old 23-11-2009, 4:46 PM
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If your mother is ill as you say then I think it's unlikely a bank will lend her money.

I don't think putting you as a guarantor is the best solution for you - Currently, if your mother dies before the debts are paid off they will have to be written off. Otherwise you are effectively taking on her debts, which could plague you for years after her death.

The debts are unsecured, my advice is not to secure them on the house as you will lose this inheritance. As above - go seek professional advice & negotiate the payments down, I'm sure her age will play in her favour.
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# 7
Conrad
Old 23-11-2009, 4:49 PM
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She will not get a mortgage apart from one with a very high rate between 13 and 18%.!

An equity release rate will be far lower, so I see no reason why you don't explore that route.
I run my own specialist finance consultancy for those with complex issues. I am not FCA regulated (by choice). I mention this as some users like to run things by me. I do not offer advice, only information.
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# 8
McKneff
Old 23-11-2009, 4:56 PM
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signing the house over isnt really an option due to the 7 year rule, if she had to go into a home it would be treated as if she still owned the house.
Or even if she needed to claim acertain benefits.
No one can make you feel inferior without your consent
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# 9
justjohn
Old 23-11-2009, 4:57 PM
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Quote:
Originally Posted by McKneff View Post
signing the house over isnt really an option due to the 7 year rule, if she had to go into a home it would be treated as if she still owned the house.
Or even if she needed to claim any benefits.

hi thought it was 5 year

What about a trust ???

OP have a look here http://forums.moneysavingexpert.com/...html?t=2099375
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# 10
lincroft1710
Old 23-11-2009, 4:57 PM
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If she goes into care, the house would probably be sold to meet the care costs. If her income is insufficient to cover mortgage payments, she will clearly not get a mortgage. Should she die in debt, then her creditors may well be able to claim off the estate.

As previous posters have said seek professional advice.
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# 11
Chop
Old 23-11-2009, 4:57 PM
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[QUOTE=hoggums;27161585]If your mother is ill as you say then I think it's unlikely a bank will lend her money.

The debts are unsecured, my advice is not to secure them on the house as you will lose this inheritance. QUOTE]

She has MS and has had it for years, but ageing and its gradual deteriorating nature makes it so much worse.

Even if we can negotiate the debts down we still have no money to pay for urgent house repairs and outstandng solictor bills, plus she is overspent each month so the debt is just mounting. I can't see any way but to secure against the house - and right now I don't care about inheritance I just want a decent standard of living for my mum.

Is equity release as bad as it seems? Martin never writes about them so that must mean there aren't any good ones......

Thanks all for comments so far, I massively appreciate them all.
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# 12
Caz3121
Old 23-11-2009, 5:01 PM
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Quote:
Originally Posted by hoggums View Post
Currently, if your mother dies before the debts are paid off they will have to be written off. Otherwise you are effectively taking on her debts, which could plague you for years after her death.

The debts are unsecured, my advice is not to secure them on the house as you will lose this inheritance. As above - go seek professional advice & negotiate the payments down, I'm sure her age will play in her favour.
I do not believe this is correct. When someone dies the debts cannot be passed to someone else to pay however the estate will be responsible for the debts. The house becomes part of the estate so the debts are likely to still be payable. If someone lives in rented and has no assets then they have no estate so the debts would die
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# 13
justjohn
Old 23-11-2009, 5:04 PM
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OP

What about a care home ??

They are not all bad and you have time and the money to pay for a good one if you are not bothered about inheritance or who gets the assets.

You realy should take profesional advice as you are at a crossroads.
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# 14
simpywimpy
Old 23-11-2009, 5:07 PM
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not sure what the top age limit is but my dad's mortgage is with alliance & leicester on a 30yr interest only term which will clear when he goes and the house is sold.

Worth a try because the rate wasnt higher than anywhere else
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# 15
Chop
Old 24-11-2009, 6:00 PM
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Default Still not sure.....

I really do appreciate everyone's advice and I can assure you this is not something we're rushing into and we really have considered all options.

I am trying to find a profesional for advice (with no fee) but in the meantime, can anyone answer my original question of whether a 71/72yr old could, in theory, get a mortgage with me as a guarantor if we proved we could meet the repayments? Would we be able to get a decent rate? LTV rate would be around 20-25%.

Or, should we consider equity release?

Thanks for taking the trouble to respond.
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# 16
Leon W
Old 24-11-2009, 6:30 PM
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Yes, a 72 year old can have a mortgage. There are lenders with no upper age limit but they would need to be satisfied of pension income and/or guarantors income.

In my opinion you wont find any mortgage professional give you advice on a "no fee" basis as, as you are aware, it really is a complicated situation which will require some serious consideration in order to give you the best advice. Typical introducer fee (paid by a lender) on a £20k mortgage is £60 before regulatory costs/overheads/tax etc so I hope you take my point in the spirit in which it is given.

All the best.
I am a Mortgage Broker

You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
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# 17
EdInvestor
Old 24-11-2009, 6:46 PM
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[QUOTE=Chop;27162049]
Quote:
Originally Posted by hoggums View Post
Is equity release as bad as it seems? Martin never writes about them so that must mean there aren't any good ones......

You can't make that assumption.Equity release is more expensive than an ordinary mortgage but it is now set up to protect customers, unlike in the past.Of course those who might inherit don't tend to like it.

www.ship-ltd.org

If the home seems likely to be used to pay for care you may as well go the ER route.

Alternatively you could sell the house and move mother to sheltered accommodation while paying off debt (but this would impact benefits).
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# 18
Radiantsoul
Old 24-11-2009, 8:29 PM
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Quote:
Originally Posted by Caz3121 View Post
I do not believe this is correct. When someone dies the debts cannot be passed to someone else to pay however the estate will be responsible for the debts. The house becomes part of the estate so the debts are likely to still be payable. If someone lives in rented and has no assets then they have no estate so the debts would die
The insolvent estate would have an asset though. This would be the transfer at undervalue of the property. You cannot transfer assets and then declare yourself bankrupt and expect it to be unchallenged, the fact that you are dead makes no difference to that.

I would suggest that transferring the property for no consideration is a bad idea and also slightly dishonest.
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# 19
Trollfever
Old 24-11-2009, 8:59 PM
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This is from the FSA.money from your hom
http://www.moneymadeclear.fsa.gov.uk...ty_release.pdf
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