Mortgage choices for 66 yr old

k-hkr

Hi, a family member has recently fallen ill with heart problems that means she can no longer work. She took out a mortgage about 4 years ago over 15 yrs I believe. She has been told she will get pension credits and has applied for carer allowance but is looking at possibly only £140/week income. Her outgoings are about £500 a month for household bills and mortgage.

The question I have is are there any lenders out there who would maybe allow an interest only mortgage as she has around £65k mortgage with house worth around £100k, so say 65% ltv.

If she could get a deal like that and keep the payments down then she could probably stay in her house, otherwise we fear she would have to sell it and go rented but then would have to use any money she had from the sale until it got below the threshold for getting benefits and would have nothing to leave her children.

poppy10_2

Unlikely they will let her go interest-only without a plan of how she will eventually repay the capital.

In the short term she can apply for SMI after 13 weeks if she is on income support - this will take care of the mortgage payments for up to 2 years. However if this is going to be a long term situation she will need to think about selling up and moving somewhere cheaper, or renting.

k-hkr wrote: »

we fear she would have to sell it and go rented but then would have to use any money she had from the sale until it got below the threshold for getting benefits and would have nothing to leave her children.

Yes, that's sad if she has nothing to leave to her children, but equally it's sad if money I could give to my children ends up being taken away in taxes, to be handed out in benefits, so she can pass it on to her children.

Did she take out payment protection insurance when she took out the mortgage? At 62 she must have anticipated that she might not be able to work much longer, whether through ill-health or retirement.

paddedjohn

Its hard but the only option may be to sell up, take the £35k she has in the house and rent somewhere, maybe rent a room off one of her kids. Why should she be able to live off benefits (the public purse) and give her cash to her children? Its not a bottomless pit, its there for the people in need, NOT THE PEOPLE WHO WANT.

getmore4less

Why a 15y £65k mortgage at 62?

getmore4less

If she could get a deal like that and keep the payments down then she could probably stay in her house, otherwise we fear she would have to sell it and go rented but then would have to use any money she had from the sale until it got below the threshold for getting benefits and would have nothing to leave her children


Why can't the kids bail her out now and reap their rewards later?

Let_Us_See

Whilst I detest the 'claim' culture' that seems prevalant in the UK, there are serious issues involved in this thread. Unless your relative was self-employed at the time and planned to work beyond the normally accepted retirement age of 65, or had means of income during retirement, how on earth did she manage (or commit herself) to a 15 year mortgage term aged 62 years?

Whether the mortgage was arranged by a broker or direct with a lender I would review the application form and the suitability letter, as this may well be a case of mis-selling.

maninthestreet

Was your mother self-employed?

Incyder

66, heart condition, can't work.
Perhaps its time to sell up and spend the equity on a few holidays before the grim reaper comes a knocking.

maninthestreet

OP - I assumed in my previous post this relative was your mother - my apologies if that is not the case.
So was this relative working 4 years ago when the mortgage was taken out? If so, was your relative employed or self-employed? Do they have any pension income?

k-hkr

Thanks for the replies. She is/was self employed as a carer. It was either 4 or 5 years ago she took the mortgage out as I was surprised she got one. I don't have the details of the mortgage but am sure she went through a broker as she is not financially savvy. She actually got 17k off her mortgage a couple of years ago - something to do with the mortgage provider being taken over? I never got the details.

My wife says she thinks it is a 15 yr mortgage but I would be surprised and think more like 10 yrs but given she originally had something like 90k mortgage her repayments would have been very high. She doesn't have a private pension.

On the subject of benefits - she does not receive benefits as such but just the pension credit and has a claim in for carers allowance with the illness.

Bottom line is she will only get around £140-170 a week and will struggle to pay mortgage as it is. I thought there may be a chance of a lender doing interest only with the equity she has in the home without having a repayment vehicle. Just payment of mortgage capital on her passing away. I realise times are not like they were a few years ago but there must be many in the same boat so just wondered if there was any chance there were any lenders who specialised in this area or something.

As for selling up. Well, at the moment she refuses to even consider this. It may be she doesn't have a choice in the end. I know what people are saying about benefits etc but I am of the opinion that if you have worked all your life and paid your dues then why the hell should you then have to sell up and live off your house equity until it has nearly all gone before claiming some money. Especially when you have paid for the ever increasing number of people in this country who have never paid a penny in taxes in their lives yet milk every penny in benefits possible.

getmore4less

I am of the opinion that if you have worked all your life and paid your dues

With a £65k mortgage at 66 something has gone wrong with the finances.

Are you sure this is a repayment mortgage, zero interest over 15 years is £360pm if over 10 thats £540pm

Interest only could still be an issue when rates go up, 5% is £270pm

This house is going to rot there is no money to maintain it.


Dig deeper this will not turn out good if she starts defaulting.