Mortgage for 59 year old

jow1

Hi there,

thanks for reading this.

I am looking for some advice about either mortgage or long term loan products available for someone who is not far off retirement age. The situation is as follows:

The person is 59, currently unemployed but wants to set up their own business (partly because of their age and finding it difficult to get work).

They are buying a house mortgage free (money comes from an inheritance) and I was wondering if there would be a way of using some of the equity in the house to support themselves while they set up the business. I know that some lenders do offer mortgages for people but they want proof of retirement income which of course, at the moment this person can't provide. However, as the house will be purchased mortgage free and so there will be a large amount of equity would there be any lenders who may consider a mortgage/remortgage (even though there will be no mortgage on the property in the first place) in this situation?

Would it make a difference if someone were willing to stand as guarantor for the repayments?

Thank you for your help with this slightly complicated situation.

jow1

kingstreet

No income = no mortgage.

Why don't they just buy a cheaper property so they don't use all the inheritance on property purchase?

somethingcorporate

How do they intend to pay back the mortgage with no income? All the equity in the world doesn't pay back a loan.

maninthestreet

So this person is going to buy a house out-right with cash, then try to get a mortgage secured on it? I can't follow the logic here.

WaxiesDargle

somethingcorporate wrote: »

How do they intend to pay back the mortgage with no income? All the equity in the world doesn't pay back a loan.

I think this is the question that needs answering before going any further...

possibly the OP thinks their new business will be an instant success and income from it will pay off the mortgage...but no mortgage will be given on chance...banks aint the best speculators

Rafter

If the business plan is good enough, you should be able to get a business loan secured on the house.

However, if the business doesn't work out then the bank will repossess the property.

As others suggest, buy a smaller property, use to surplus to get the business up and running and support themselves. Then if the business doesn't work out they still have a roof over their head.

R.

handytips

Really !
Please do not ask them to get a business loan as they will want personal guarantees, and the other thing to remember a business loan can be called in at anytime. Downsize is the only option here, as there is no mortgage available.