Can an 85 year old get a mortgage/bridging loan?

stewarthenry

Hi

For health reasons, my father-in-law needs to move very quickly to a more accessible house. The house he wants to buy will cost £500k. His current house (with no debt) is worth £700k but he won't be able to sell it by the time he needs to be in the new house.

The calls I have made indicate nobody is prepared to lend money to an 85 year old, even though he would have £1.2 million of property to cover a £500k loan. (Indeed probably only need £200k loan as we and other children will contribute.)

Does anybody know of a way to do this?

Thanks

H

FireWyrm

How much do you trust your father in law?

You could try for a loan in his place, but I can't think that anyone would be mad enough to lend him the money. It's not going to happen. Statistically, he's living on borrowed time and so a lender will be looking at his sudden demise in terms of being a serious risk, especially as the stated reason for needing the loan is to move because of 'health reasons'.

agrinnall

I very much doubt if anyone will lend him £200K, let alone £500K. If he has to move quickly he may have to temporarily go into rented accommodation while his current house sells.

xylophone

Would it not be possible for him to stay with family while the house is put on the market?
If this is not possible, would it be feasible to organize a short short stay in a retirement home?

stewarthenry

The problem is that he has lived in the village for over 40 years, desperately wants to stay there and there are very few houses in the village that would be accessible. So another one is unlikely to come up for years.

What surprises me is the focus on age. The security in mortgages is actually the property, not the person. Mortgage companies generally see loans at under 60% of house value as risk-free.

I would have thought some financial company would have the sense to see there is a market here (old folk downsizing to more manageable properties, sometimes urgently) and would be prepared to loan based on the security of the property.

FireWyrm

on the size of property you are talking about, IHT takes a giant bite out of the asset, not to mention that probate takes forever and the chances of there being 'other' charges on the property like care fees etc...it's just too much trouble.

AMO

The property is at the high end and therefore your pool of buyers will be low. Selling fast will be a problem.

The only easy solution is to sell to one of those companies that buy any house, but they'll knock 1/3 off the valuation. I am not saying I recommend going this way.

If there are any mortgage companies out there that will help you, they will increase your risk as their risk is increased. This means less competitive loan rates BUT ALSO that both houses are lost if the bank reposesses. This should not be a problem to you if you do not see an 80 year old as a risk.

The easiest way out of this is to get a family member to take out the mortgage (it may not be easy) and then work out the ins and outs so there are no family quarrels.

tyllwyd

Would an equity release plan on the current house be able to raise enough to buy the new one?

Trollfever

stewarthenry wrote: »

The problem is that he has lived in the village for over 40 years, desperately wants to stay there and there are very few houses in the village that would be accessible. So another one is unlikely to come up for years.

What surprises me is the focus on age. The security in mortgages is actually the property, not the person. Mortgage companies generally see loans at under 60% of house value as risk-free.

I would have thought some financial company would have the sense to see there is a market here (old folk downsizing to more manageable properties, sometimes urgently) and would be prepared to loan based on the security of the property.

The FSA and Responsible Lending.

http://www.fsa.gov.uk/smallfirms/resources/factsheets/pdfs/responsible_lending.pdf

wouldbeqaulitymoneysaver

I would personally aim to be cash rich to buy a Property outright than approach an ageist Company for a Mortgage.
Your quandary reveals how ageist etc Finance Companies are, more fool them.

Thrugelmir

stewarthenry wrote: »

I would have thought some financial company would have the sense to see there is a market here (old folk downsizing to more manageable properties, sometimes urgently) and would be prepared to loan based on the security of the property.

Why not reduce the price of the current property so that it attracts interest and sells quickly?