Remortgage

Greywolf

I wonder if anyone can help me as a newbie on here?

I’m retired with a small pension. Last year I sold my Bucks house, paid off the excess mortgage and I have bought and renovated a house near Preston which is now on the market. I live in rented accommodation. Can I, should I get a remortgage on the property to a) allow me to buy a much cheaper house to live in in Cliotheroe and b) to live on (vital, since funds are limited) till the first house is sold?

In fact, I'm very anxious...so any advice or pointers would be very welcome.

MarkyMarkD

I think, from what you are saying, that you don't have a mortgage on the Preston property - so you would be wanting a mortgage to withdraw equity, rather than a remortgage.

If you are letting it out, you would really need a "buy to let" mortgage, and it's not likely to be financially a good plan to take out such a mortgage when you are actively marketing the house - the set-up costs (and legal costs) are likely to be fairly prohibitive.

If you are not, and it's empty after renovation, surely you should consider moving into it until it's sold (meaning you save your rental costs) and THEN buy another house with the equity you release from the Preston house.

I'm not sure I see the need to take out a mortgage in your circumstances, and on a limited income it might be difficult for you to do so.

Debt_Free_Chick

From what you say about your situation Greywolf, it sounds as though you need an equity release plan i.e. release equity now, to repay from the proceeds of the sale of the house, on death. This way, you don't have the same issues with needing income to fund repayments, as you do with a mortgage.

There's a good overview of equity release on the Age Concern website here
http://www.ageconcern.org.uk/AgeConcern/information_794.htm

BUT - do plenty of research and take advice, as the bad plans are very, very bad indeed and can result in severe financial hardship. You also need to consider any inheritance issues, if you are planning to leave the property to others, on your death.