Remortage Advice

josephm4

Hi, I am a newby in all this and I would be grateful for any advice/tips.
Scenerio is my mother aged 61, bought a rtb council flat for 90K. She currently has a 34K Abbey 10 yr interest only 2 yr tracker discount mortgage. current Interest rate 4.79% taken out in May 2006.

Property is currently worth 300K and she would like to borow 100k for another property investment.

The money she earns would not warant a loan of that amount, I believe she may be able to borrow on the Loan to value ratio.

I would be grateful for any advice as to how and where to proceed. We have initially made enquiries with Abbey, but not expecting any miracules with them

Read Remortgaging guide and found very useful. Please help as we can't afford to make any mistakes!!!

Thanks in advance for any replies.

hokkers999

josephm4 wrote: »

Hi, I am a newby in all this and I would be grateful for any advice/tips.
Scenerio is my mother aged 61, bought a rtb council flat for 90K. She currently has a 34K Abbey 10 yr interest only 2 yr tracker discount mortgage. current Interest rate 4.79% taken out in May 2006.

Property is currently worth 300K and she would like to borow 100k for another property investment.

The money she earns would not warant a loan of that amount, I believe she may be able to borrow on the Loan to value ratio.

I would be grateful for any advice as to how and where to proceed. We have initially made enquiries with Abbey, but not expecting any miracules with them

Read Remortgaging guide and found very useful. Please help as we can't afford to make any mistakes!!!

Thanks in advance for any replies.

1. Was it purchased in May '06? From the value stated probably not, but don't forget about pre-emption which is either 3 or 5 years. You'd need council permission to remortgage...
2. Mortgage already runs past retirement age, so lenders will ask for some evidence it is affordable past the age of 65.
3. Doesn't matter what the LTV is, you still need a plausible income stream.
4. With 265 equity has she considered selling, buy for 165 invest 100 (subject to caveat from point 1 of course).

********
I am a Mortgage Adviser
You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice

josephm4

Firstly may I thank you for your reply.

The property was purchased in 2000/01 and switched mortgage lenders in 2006.
Does this mean she would need council permission to remortgage?
As her current salary is low would this mean this is a non-starter?
Would it be easier/quicker to remortgage with Abbey and then switch at a later date?
She hasn't considered selling, however once she has sorted out this venture it may be feasible.

MortgageMamma

No she wont need permission to remortgage

is there nobody else who could support the mortgage payments with her?

What does she want to raise the additional capital for?

JoeK_3

MortgageMamma wrote: »

No she wont need permission to remortgage

is there nobody else who could support the mortgage payments with her?

What does she want to raise the additional capital for?

Nice questions MortgageMamma.

Did you manage to find all your hidden Easter eggs then?

Josephm4

Please tell us why a 61 year old has suddenly decided to put her equity at risk when she can't even repay her existing mortgage.

It sounds to me like this lady needs to take a reality check or take some advice from someone else maybe???

JoeK

UK007BullDog

Her income needs to support her current mortgage. As its interest only she is not reducing the debt. She wants to borrow more to invest elsewhere, which means higher mortgage payments.

How is she going to pay the mortgage once she is a pensioner?

If she uses the money to purchase another property and the people are not paying the rent she is also responsible for that mortgage. Can she afford that?

I don't think she realises what she is wanting to take on.

Plus this question was posted on this board a couple of weeks ago if memory serves me right.

I think some lenders might insist she speak to a financial adviser to ensure she understands the risks involved. Unless you are willing to do this with your mom together and you will be 100% liable for the mortgages.

Everyone is jumping on the bandwagon in investing in property without understanding the risks. That is why repossessions are on the rise.

josephm4

:eek: I,d like to firstly thank you all for responding, and respond to some of the questions raised.

MM. the only person who could support the mortgage payments would be my step-father, problem is he lives and works in CANADA!. So I believe this cancels him out. She wants to raise the capital for a property investment abroad.
JOek, at 61 my mother is probably physically fitter & healther than you will ever be, dont knock it! She has made provision for this current mortgage and will not jepodise her current situation which is why she intends to get as much info. and advice as possible and with that make an informed decision.
uk007bulldog - she's already a pensioner! I can't unfortunately support her mortgage as I am now a full time student.
Don't shoot me down as I am just a newby so be gentle. Ideally she would like to rent out the current property and the one she wants to invest in with the mortgage being paid in that way (Let to buy I believe). They would both be managed by agents seperately so any problems with rent would be addressed swiftly and if there are any shortfalls, then of course my step-father would step in. However, as said before all/any avenues would be looked into. (we are strictly tip-toeing, no Jumping)
Feel free to set me straight if you so wish all advice accepted.