Parents want to Buy to Let

Bromley86

My parents are thinking of BTL a bungalow so it's ready for them when stairs become an issue.

They're 71 & 72. They've got a good pension and will want to borrow ~25% of the purchase price (<2x that income). They'd be looking to pay back over about 10 years.

Is there a list of lenders with the ages they'll lend to?

They already have a home but it's mortgage free. When I'm searching, presumably I need the BTL rate mortgages.

Finally, is a pension income as good to a mortgage company as a salary, or does it put you in the self-cert category.

Thanks.

EDIT: Any lists I've found of lenders for the temporally challenged:
http://www.lovemoney.com/news/the-property-ladder/lending-to-older-homeowners-1772.aspx

happybroker

pension income is admissable by some lenders and your parents age will present a problem to some but not all lenders.

they have options on how they raise the cash, they could do it by way of a remortgage of their home which will offer the benefit of lower fees and possibly lower rates, or they can look at buy to let, in which case their income wouldn't become too much of an issue as this would probably be self funding.

I think given the compexities thrown up by age, income source etc you ought really to find a quality whole of market broker who may well be able to save you a heck of a lot of time and leg work.

Trollfever

Some information from the FSA:

http://www.moneymadeclear.fsa.gov.uk/pdfs/equity_release_ink.pdf

Gorgeous_George

Two options. Ring around a few lenders and ask or seek the services of a most of market mortgage broker. Britannia lend to people beyond the age of 65 for residential mortgages and this will be the better option for your parents.

Why don't they just sell up and move into a bungalow now? I did so in 1999 at the grand old age of 36 and I don't think I'll ever move into a house again. I'm not sure what it is that I like about the bungalow but there must be something working at a sub-concious level.

I know they, like most people of their age, would not consider moving into rented but this is one area where I would like to see a surge in rental accommodation. Inevitably, old people die and by moving into rented they can release cash for holidays or just to subsidise their pensions and when they die there is no house to be sold. One problem is the lack if security of tenure that is offered by BTL.

GG

getmore4less

Why not just move now and settle.

I think buying somewhere to move into later has a few pitfalls.

The place gets trashed.

can they rent it.(voids=costs)

When they think they are ready to move, they then have a place to sell that has stairs.

dimbo61

There are lots of over 55,s flats and apartments to rent from housing assocations and charities which your parents could move into.
My dad sold his big old house a few years ago and has never looked back !
He went on holiday 5 times that year ( spending my inheritence !!! )
He is chairmen of the residence committee and helps out with the gardens.
He only pays rent with electric heating/lighting included in that.
The warden checks on all the residents each morning and the people living there feel safe.
They could enjoy there retirement with money in the bank which they have worked hard to get.
GOOD LUCK

BTLMortgages

Yes, you will be looking for a buy to let mortgage as probably equity release will be too expensive if they are thinking to sell the present property and pay the outstanding when they move to new one.

Lenders:

C&G up to 75 years old at the end of the term
Godiva up to 85 years old at the end of the term

cheers
Steve

Bromley86

Thanks guys. Looks like I'm not going to be a helpful, internet-savvy son then as I'll be recommending they go to a broker .

happybroker

BTLMortgages wrote: »

Yes, you will be looking for a buy to let mortgage as probably equity release will be too expensive if they are thinking to sell the present property and pay the outstanding when they move to new one.

Lenders:

C&G up to 75 years old at the end of the term
Godiva up to 85 years old at the end of the term

cheers
Steve

equity release as in "lifetime" may be more expensive, not sure - don't advise on them, but release of equity by way of a remortgage of the main home would almost certainly incurr lower fees, Abbey go up to 85 years £549 fee no val or legals with same rate as Godiva who would charge £2k plus legals (free val).

Outstanding could be ported to bungalow on sale if before the end of any tie in period.

luckyfool

I would consider the residential remortgage on their own property as well, allowing them to buy the other property for cash, and rent it out until they are ready to move.

Bromley86

In this particular case, they wouldn't be moving for as long as possible (say 5 years or so).

If they mortgaged their currently unmortgaged house, they'd be happy to pay off that mortgage when it's sold.