Retired Mortgage

thecrazy1_2

Hi All

My dad is retired and owns a property mortgage free that he rents out. He is now looking to buy a property to live in but does not want to sell the house he lets out. Is Is there any way for a retired man to get a mortgage. His income will be private pension, bonds and money from the rented property.

Thanks

maninthestreet

How much money does he have for a deposit? What is his annual gross income?

Wh05apk

Potentially he could remortgage the existing property to a buy to let, probably up to about 70% ltv.

Depending on pensions/age etc he may be able to find a lender who will lend on the new residential property, possibly interest only using the sale of the rented property as repayment vehicle.

holly_hobby

Nationwide will consider rental income from a self sufficient and unencumbered (mortgage free) rental propety, in addition to income from other sources.

Your problem (assuming income is ok), with any traditional residential mge lender (for prop no 2) is their max lending age ..... YBS were one of the few lenders who didn't have an upper age limit and accepted interest only, but even thats now changed.

I would suggest a lifetime mge arrangement on the first property, whereby Dad would still retain all the rental income to fund his new home pch, but as its to be let, I am v doubtfull (but not 100% sure), that the providers would find this unacceptable due to the mechanics of when a lifetime mge becomes repayable.

Failing all of that ... could Dad just not sell the 1st one and pch his new dream home with the monies realised on sale ?

Hope this helps

Holly

Thrugelmir

No logic in renting a house out to pay tax on the income, only to borrow more money that's going to repay a mortgage out of taxed income.

thecrazy1_2

Well I guess due to his age and health he is unlikely to get a mortgage. I naively thought that if he remorgaged his first house and then died within several years the house would be sold to clear the debt.

Gross income about £20,000
house price £250,000 negotiable
Deposit £50-80,000

He would like to keep the first house as it is a family house and he rents it out to a family member. He is mortage free on that property.

Wh05apk

What's his age, and how much is the new house he is looking to buy?

thecrazy1_2

His age is 66 the house he is thinking of buying is on the market for £250,000
He currently lives in the annexe which he pays £580 pcm for. The owner of the main house is selling so if he bought it he could rent out the annexe.His main house is worth about £250,000 as well.

Wh05apk

A problem is that if the BTL is for family, that would be classed as a "regulated" BTL which few lenders do, he may be able to get a mortgage of about £60k based on his income/age, but the new lender would not permit renting the annex, the overall situation is quite complex, but may be do-able with some thought once the full details are known, I would suggest a meeting with a broker to establish what can/can't be done.

Thrugelmir

thecrazy1 wrote: »

He would like to keep the first house as it is a family house and he rents it out to a family member.

Is the income being declared?

thecrazy1_2

Hi

Thanks for all the help, I think you are right we need to sit down with a broker.
Is there any way of putting a mortgage in joint names i.e his wife who lives in her own mortgage free house or a daughter although she is on incapacity benefit.

The answer to the second question is Yes it is being declared.

He also has a mobile home he rents out which brings in a gross income of about £6-7,000 pa