Having to move for health reasons - mortgage???

grummps

jimjames wrote: »

You may find that you cannot move the mortgage and are unable to get another interest only. Most banks are no longer offering them and with your current income I would imagine they wouldn't grant a new mortgage on any basis.

Unfortunately it sounds like you're stuck between a rock & a hard place and with the numbers you've given I can't see any way that you'd be able to move to a more expensive property so the choice may end up as stay where you are or rent. Sorry

Staying where we are is a non starter really, and using the equity to pay the rent is like setting fire to a pile of £20 notes!

Our concern apart from the loss of our life savings that way, is that we dread what other renters have to do and move home every 6/12 months. Our daughter and her three children never stay in the same house for more than 6 months as they keep putting up the rent and having to rely on housing benefit, that keeps going down. Up to now, over the past 10 years she has had to move 18 times which isn't good for the children. Each move means she has to go down market so that the Housing Benefit matches the rent. She is currently over crowded but it's all she can afford having gone from a 3 bed to a 2 bed property.

seven-day-weekend

Could you rent out your home and then use the rent you receive to rent something for yourselves? That way you get to keep your home.

Or consider a flat rather than a bungalow, this will almost certainly be cheaper. Round our way your £90k equity will buy a two-bedroom flat in a nice area. Our son has just bought one for £65k.

Another way is what some friends of ours have done. They have raised a mortgage on their house, then used the money to buy a ground floor flat outright. They then rent out their house and the rent more than covers the mortgage. I know this option probably will not be possible for you as you already owe £100k, however I mention it as it may be an option for someone. We are thinking of doing something like this if we move onto one level.

grummps

Wickedkitten wrote: »

It would be interesting to know when the IO runs out as they might have to end up renting anyway.

The mortgage has to be repaid in 2018. Why do you say that? We will have the £100,000 to repay it.

We received an inheritance when we bought the house. We used £50,000 as a deposit and took out the £100,000 mortgage.

The balance of the inheritance (£150,000) was invested in a long term investment by the solicitor for us in 2003. We don't have access to this investment but get the money back in 2018.

The trouble is we need to move now, not in 6 years time.

recoverydust

Can you arrange matters so that your daughter comes and lives with you?

poppysarah

grummps wrote: »

Thank for that - very helpful!

Apart from my objection to renting and pouring money into the back pocket of a landlord, I prefer to own my own property.

Interest only mortgage isn't really moving towards owning your own property.

Rent.
As you get older you will find it easier to not have to worry about finding money for repairs.

hellokitty08

Now in ordinary circumstances I woudlnt reccomend a shared ownership property, however it reccently worked for someone I know.

They bought a shared ownership 55+ apartment. Cost them 1/3 less then what they sold their house for and they dont pay any rent on the 30% they dont own.

Effectively gave them 1/3 of their selling price to spend on things they wanted and the peace of mind that they still had money invested in property to leave to the kids.

DVardysShadow

grummps wrote: »

Current property is worth about £190,000, with an interest only mortgage of £100,000 on it.

Bungalows are priced at about £250,000.

This is going nowhere. Taking £10,000 off your equity and for fees, you have £80,000 and a mortgage of £100,000. Now you will need a mortgage of £170,000. And a method of repaying, because whatever you do now, you are unlikely get interest only. - iunless your inheritance investment is sufficiently gold plated that a lender will be satisfied it will pay back.

BitterAndTwisted

If you sold up you would have £80k in cash to see you through the six years until your £150k investment pays out.

A sensible person might be looking to rent somewhere that £150k in cash plus whatever was left of the £80k after six years of paying rent could buy somewhere outright when the time comes.

You do have choices, but it's unfortunate that you don't like any of the options open to you.

ClaretHead

Is there any way that you can access the investment funds before 2018? You may have to pay a penalty for withdrawing early, but surely that would be worth it if it allows you to buy a good bungalow.

grummps

BitterAndTwisted wrote: »

If you sold up you would have £80k in cash to see you through the six years until your £150k investment pays out.

A sensible person might be looking to rent somewhere that £150k in cash plus whatever was left of the £80k after six years of paying rent could buy somewhere outright when the time comes.

You do have choices, but it's unfortunate that you don't like any of the options open to you.

I fully understand what you are saying, and yes that is an option.

But that would mean that over those 6 years I will have to pay out £50,000+ in rental payments, something that I find distasteful.

Personally I do like the idea of purchasing a 70% share in a property (2 bed ground floor apartment) now - £80,000 on a property valued at £115,000, no rent to pay on the other 30%. This will mean that when we go the children would inherit 70% of the sale proceeds + it gives me the option now to move the £150,000 into a Jersey based family trust from the current Jersey based discretionary trust with the children being the beneficaries and trustees as we would no longer have the need for that capital in 2018.
Effectively reducing our estate value and also reducing the fear that we could possibly end up having to fund our care in future years with the whole lot combined.

Time methinks to find out all about these part buy apartments.