Mortgage for older couple - advice needed

wpp34

Wife is 57, I am 61. Mortgage on house paid off a couple of years ago so have around 400k equity in it. Daughter off to uni next September and I will be contributing around £300+ per month for her living expenses. As she is going Portsmouth where wife comes from and where we visit 5 or 6 times a year she wondered about the feasibility of buying a 2 bedroomed flat there, cost around 100k, and paying mortgage instead of daughter. Daughter could live there and we could use on visits. We could easily find a deposit of 25k or so but would not want to use other savings that are in longer term deposits etc. Would only be feasible if we could get an interest only deal but reading these forums has lead me to think that this is not possible anymore. Any advice welcome.

Wh05apk

Provided you have income of around£25-30k, you should have no problem, I would suggest a remortgage on your current home, which will give you a far lower LTV and hence rates, you would then likely be able to get interest only as well (not interest free!) possibly look at offset style to allow you to repay the mortgage if/when you sell the flat ithout penalty.

Dave_Ham

As above, you have 2 options.

Both will depend upon income and you may be better getting some formal advice, so you can weigh up.

You can get the buy to let and £25k would be sufficient or capital raise on your home and you will achieve a better rate and buy the Portsmouth property outright.

Good luck

Conrad

Otherwise try a buy to let, some lenders need no income proof, although some can be sniffy about letting to a family member.

B2L allows pure interest only no issues, and up to age 85.

wpp34

Wh05apk wrote: »

Provided you have income of around£25-30k, you should have no problem, I would suggest a remortgage on your current home, which will give you a far lower LTV and hence rates, you would then likely be able to get interest only as well (not interest free!) possibly look at offset style to allow you to repay the mortgage if/when you sell the flat ithout penalty.

My gross income currently is around £48K but will go down to £28k when I am 65. Wife income around £35k. Would it be best to go for deal based on joint incomes then?

Wh05apk

I would recomend doing in joint names almost always, you should have sufficient incometo do on a residential basis which will be the cheapest option, rate wise you will get lower on your current property and because of the low LTV will likely get interest only as well, whereas on the flat, unless you go BTL (higher rates) you will likely have to ge repayment but becuae of the short term payments will be high.

baffled_2

We are 66 and 64 respectively and took out a mortgage for our son (onour property), 6 years ago. We were told yesterday, albeit by a claim company call, that we shouldn't have been given a mortgage that would take us beyond retirement age. Is this so?

harvey115

baffled wrote: »

We are 66 and 64 respectively and took out a mortgage for our son (onour property), 6 years ago. We were told yesterday, albeit by a claim company call, that we shouldn't have been given a mortgage that would take us beyond retirement age. Is this so?

The claim companies make up so many things. Although it sounds good when they try to convince you most of the times because they usually mention what you can claim (mostly an unrealistic sum).

Since you applied for a mortgage with an intention to pay even after your retirement. The lender at the time ran your scenario through their affordability calculator and thought that you can afford to pay your mortgage payments after retirement (on your pension).

So it does not look like a mis-selling, unless you were forced to buy your mortgage from the lender.

I am not expert at this, just thought to add something from my understanding.

Dave_Ham

baffled wrote: »

We are 66 and 64 respectively and took out a mortgage for our son (onour property), 6 years ago. We were told yesterday, albeit by a claim company call, that we shouldn't have been given a mortgage that would take us beyond retirement age. Is this so?

Absolutely not the case, at some point they will want you to pay them to take the case forward of which there is not one. Speculative at best.

Lending into retirement is tricky and there are sometimes additional hoops to jump through, but this is likely to have been a scam call..

If you still have their details, google the company name and see what comes up..

holly_hobby

baffled wrote: »

We are 66 and 64 respectively and took out a mortgage for our son (onour property), 6 years ago. We were told yesterday, albeit by a claim company call, that we shouldn't have been given a mortgage that would take us beyond retirement age. Is this so?

Absolute utter carp .... file it accordingly !

If you want correct guidance on this, let us know the details of why YOU believe the mge should not have been granted, and we will give comment and guidance - a term exceeding your NRA (if it has/will) is not a stand alone basis of mis-sale, however inappropriately assessed affordability over the same term may be, if it failed a responsible lending test - which would be doubtful to be honest (unless you fudged a few figs that weren't validated by the lender).

H

Conrad

baffled wrote: »

We are 66 and 64 respectively and took out a mortgage for our son (onour property), 6 years ago. We were told yesterday, albeit by a claim company call, that we shouldn't have been given a mortgage that would take us beyond retirement age. Is this so?

You may have a claim, but you do not need a middle man claims co to assist in this as mortgages are regulated, meaning there is an official complaints procedure.

If you feel you might have a claim, step one is to advise the company that set up the mortgage (a broker maybe?). They have to reply promptly and arrive at a conclusion within a couple of weeks. If you are then unsatisfied you take it to the Ombudsman (FOS) and they will make final judgment.

Now the key test is whether the mortgage was made responsibly and in light of likely sustainability given your situation at application time.