Retirement Mortgages

celialamb

I am retired (widow) I own a house in London. I have given my son 2 flats, and I retain the freehold and a flat in the house. My son has had a crisis and is not working and cannot get a mortgage because he is unemployed. However, one of the flats I gave him is empty and requires some refurbishing, (he lives in the other).

I live in a rented cottage in the country. I was wondering if I could get a retirement mortgage - the cash he could use and I could pay off the interest only mortgage and he could pay off the loan upon my death or if he came into money?

If I sell the flat now, I loose my income and I would have to pay capital gains tax.

kingstreet

I'd suggest independent financial and legal advice before embarking on this scheme. It can be done, but you would be putting your home at risk.

Why not mortgage the empty flat and get it into lettable condition? The rent can then fund the mortgage instead. The Mortgage Works will look at stand-alone BTLs where personal income is ignored. The rent will need to be a percentage above the mortgage payment, 25%-30% more IIRC.

celialamb

Do the Mortgage Works deal with the public, on first viewing they appear to be for the industry?

celialamb

Just rung them non-the-less and as we (me 1, my son 2) own three of the four flats, there is too much exposure. I asked him to explain, but didn't understand the reasoning. Hey ho.

Conrad

Ok this is fairly simple to set up for an EXPERIENCED MORTGAGE BORKER (this is not the work of an IFA / Financial adviser). Beware taking legal actions up front - this can often cause a lot of issues as lawyers are not abreast of lender criteria - this happened on a case of mine recently where the lawyers organised the rearranging of the deeds, but when it came to raising finance no lender could assist so all the lawyers deed work had to be undone.

celialamb

so, I have just rung a financial advisor. I asked about equity release, but as I rent out the flat I would be using to release the equity - they say I cannot do it. It would only work if I were living in the flat. Is there another way of us (or my son) releasing some of our equity?