Advice for my Dad

Bluebell1000

My Dad will be turning 60 shortly. He'll have around 70-80k cash in pension advances and owns his current house outright (value tbc but my guess is £220k). He's planning to keep working for another year or two (can take his pension at the same time), and then move to be nearer me.

He'd like to buy a house in my area without selling his current house first. He'd be looking in the region of £100-150k, so he'd need at most 50% mortgage, which he could repay when he moves and sells his current house. It would mean he'd have time to do work on the house and get it right before moving, and I expect we'd also have various other friends and family using it to visit before he moves!

I'm just making some initial enquiries as the plans are at an early stage, to see what teh options are.

1. Does he stand any chance of getting a mortgage at his age, or if the lenders think he'll be paying it back too quickly? His pension income will be about £10k p.a, obviously he has his employed earnings at the moment of about £20k p.a.

2. Might he be better looking at BTL mortgages, rather than residential, if age could be an issue? If you get a btl mortgage, do you HAVE to let it out?

3. There is a plan c which we haven't really discussed with him -we are hoping to have enough saved to repay the mortage on our BTL in a few years. We could lend him the cash instead, at the moment we have about £30k accessible which might just get him the type of place he's looking for. If a and b don't work out, could that be an easier option?

4. Anyone got any other suggestions?

Thrugelmir

4. If there's no need to. Don't draw the pension lump sum down yet. As this will continue to grow.

Though this presumably scuppers the whole plan in having the cash to put down on the new property.

If he moves then will he retain the income from his employment?

Why not wait until he wishes to retire? Rather than have a large exposure to the property market.

Bluebell1000

Thrugelmir wrote: »

4. If there's no need to. Don't draw the pension lump sum down yet. As this will continue to grow..

Thanks!

He's had financial advice through his work re. the pension, and as it's a frozen final salary scheme it makes no difference when he starts drawing the money.

Thrugelmir wrote: »

If he moves then will he retain the income from his employment?

Why not wait until he wishes to retire? Rather than have a large exposure to the property market.

No, he will fully retire (and take another pension) when he moves.

He'd like an overlap so he has time to get the new property decorated etc. He's also getting a bit fed up with work, so I think he'd like to know that he can tell them to get lost whenever he feels like it :rotfl:

There's also been one come up recently as a reposession that was a very good price (and has now sold), so if anything else turns up that's perfect for him, he'd like the option of being able to buy already in place.

Thrugelmir

Age may well the major issue. As income post retirement age will be a major consideration in the lenders eyes.

Financially, selling up then moving could be the best answer.

Bluebell1000

After weighing up the options, I thought it might be interesting for people to find out what happened.... we decided to start looking at our third option, where we put in the rest of the cash for the property, and between us had about £120k after a better counting-up session!

After we'd agreed all this, he's had a house-shopping trip, which produced one possibility well under max budget which we're getting quotes for at the moment (as it needs a fair bit of work).

However he's just sold his own house to a friend who wants it to add to their BTL portfolio, without it even going on the market! So retirement is coming up much quicker than first expected, and we're having another house hunting session this weekend.... Although not exactly planned, it looks like it he'll be going with Thrugelmir's suggestion of sell, then move....

McKneff

Thanks for the update, happy house hunting and hope your dad has a long and happy retirement.

pinkteapot

If he's selling it to a BTL landlord, could he rent it for 6 months while he looks for a new house and has any necessary work done?

I sold the flat I owned in early 2009 and the plan was that hubby and I would sell it, rent, and take our time looking for a house. As luck would have it, an investor bought it as a BTL and was more than happy for us to rent it. So we got to stay put and saved the cost/hassle of moving. Glad of that as in the end it took us 18 months to find our perfect house!

Bluebell1000

pinkteapot wrote: »

If he's selling it to a BTL landlord, could he rent it for 6 months while he looks for a new house and has any necessary work done?

I sold the flat I owned in early 2009 and the plan was that hubby and I would sell it, rent, and take our time looking for a house. As luck would have it, an investor bought it as a BTL and was more than happy for us to rent it. So we got to stay put and saved the cost/hassle of moving. Glad of that as in the end it took us 18 months to find our perfect house!

Hi, yes, that could be an option too, as it's being sold to friends I think they are prepared to be fairly flexible about things. Dad's other option is to move in with us, but hopefully it wouldn't take 18 months for him to find somewhere if he's staying in our spare room :eek:

sheslookinhot

Bluebell1000 wrote: »

Hi, yes, that could be an option too, as it's being sold to friends I think they are prepared to be fairly flexible about things. Dad's other option is to move in with us, but hopefully it wouldn't take 18 months for him to find somewhere if he's staying in our spare room :eek:

It might take him longer, given that you will spoil him.

Best to let him get his own place.

Bluebell1000

sheslookinhot wrote: »

It might take him longer, given that you will spoil him.

Best to let him get his own place.

I suspect a few weeks of staying in a house with a newborn baby would make him find somewhere pretty quickly :rotfl: We could always hide a baby monitor in his bedroom if we wanted to be really sure he was woken every 2 hours or so in the night