Please could you help, its about my Mum, and her mortgage.

Oddgy

Hi to you.

2 Questions really, one to do with the buying situation, and one to do with the mortgage, and just looking to see whether any of you guys can offer us some advice, so i can pass on to my mum.

I was just wondering whether anyone can advise on my mums situation.
My mum is 60, and is looking to downsize. She currently has a 4 bedroom terraced house, and would like a Bungalow. She lives on her own, and has currently £13k left on her mortgage. (Its a repayment)

She has put her house on the market and has had an offer for £155,500 which she has accepted. Today in fact by a first time buyer.

She has had her eye on this bungalow for about 4 days now, that is priced at £155,000. It needs some work doing to it, quite a lot, as it was owned by pensioners who have both died, so the sons are selling it as it is, without doing any work to it. Anyway, So mum had offered £145,000. Was immediately told that a offer of £146,000 was on the table, so mum offered £147,000. She never heard anything, so 2day she rang back and was told that they had an offer of £148,000. So mum said, ok, well i will go up to £148,500. The estate agent replied, sorry but we are not increasing by hundreds, only thousands so the next bid will need to be £149,000 or more. Well mum said shed get back to them, as it does sound a bit fishy that the estate agent is probably just playing with mum and not speaking to the vendors.

She really would like the bungalow, but how do we nknow that the estate agent is not taking advantage? We dont know when to go in with the next offer ot wait, or ask them to get the vendor to contact mum, just to let the estate agent know we dont want to be playing games, if thats their intention.

The other question, is that mum does need to invest some money into the Bungalow, and as she has no savings the only way she could do this is by taking out another mortgage.

I have said, that it be best if she gets a interest only, as then she can keep the montly payments as low as poss, but lets say, would a lender, give her 40k on a 25 year mortgage plan??

Im just thinking, if she has it over the most years poss, at a figure of £40k, then after buying the bungalow, she will have about £25k to spend as she likes on the house to make it more comfortable, and also, she can pay a low monthly figure by having it over many many years? I mean, she wont be here to outlive the mortgage so the years she has, she can live comfortably paying a low monthly payment.

The income she has is state pension, with pension credit, plus she is disabled so has DLA too.

Would all this be possible? Or am i thinking too deep, or a load of rubbish??

UK007BullDog

First of all she needs to think and plan ahead once she is 65 and no longer has her regular income.

A lot of lenders dislike lending to the older population as the income drastically falls. She has to make sure now that she will be able to afford the monthly payments once she is a pensioner. Most lenders would like some repayment investment vehicle in place to ensure it is paid off eventually.

She has insurance, council tax, utility bills, food clothing tv licence, maybe a car and insurance to pay. Plus a mortgage. Even interest only it could be tough for her. Has she asked for a pension forecast to see what she will get?

As for the buying process. Just drop a letter through the vendors door and ask them to negotiate with you. They are obviously trying to get the most out of it. There is a danger of a developer snatching the property, doing it up and selling it with a huge profit.

Your mom could become 100 yrs old. No one knows when we die except for the powers to be. If she needed care the property could pay for it either through rental or sale.

Oddgy

Hi. Thanks for quick reply.

Just to answer some of your questions:

Mum is a pensioner now, and shes receiving her state pension, im sure of it. She only turned 60 at the beginning of March. She was medically retired few years back as she developed cancer back in 2004, and hasnt worked since, so due to surgury and illness she is nolonger able to work in anycase. This is why she is on DLA and also on Pension Credit, as up until she turned 60, she was on income support. But now she has turned 60, it has changed over to what is called "Pension Credit"

I believe that the money she is now gettin, is what she will get for the rest of her life? Am i wrong here, as she also thinks this.

She currently pays £270 on her repayment mortgage now, and can afford to continue to pay this. So i thought with an interest only mortgage she will get a lot more money to use rather than a repayment for the same monthky payment.

Her repayment vehicle will be th bungalow, so when she dies they can get the £40k from the value of the house.

Mum has had a lot of health problems, with the cancer and everything, and yes we would love for her to live to 100, it is very unlikely, and so with this thought, wed love for her to live very comfortably in a nice little done up bungalow for the 5-15 years she may has left.

UK007BullDog

What is her exact monthly income?

UK007BullDog

interest only on £40,000 is about £200 per month on a 6% rate.

But they will lend only on her income so she might not be able to borrow that much.

Alternatively find a cheaper property.

Also I would like to point out: 155,500 - 13,000 = £142,500 is what she has to play with. Then you need to minus the fees of the current mortgage, the next mortgage, stamp duty on the new property, valuation, solicitor and agents fees. She may be able to port her current mortgage though, need to find out. So unless hse has savings she might not be able to buy that bungalow at all anyway and can stop the bidding war unless you will make up the diference or become her guarantor and be part of the mortgage, which might be a good way to secure a mortgage.

Oddgy

Her monthly income is 1245

JoeK_3

Oddgy wrote: »

Her monthly income is 1245

There are lenders out there that would accept your mum and with no age restrictions.

Have you contacted her existing lender?

JoeK

Oddgy

Yes Nationwide wanted to Port her mortgage, but, wanted to push her into gettin an ISA / endownment or something similiar. I think they may have confused her a little too much. She has 13k left and has another 8 years to go.

JoeK_3

Oddgy wrote: »

Yes Nationwide wanted to Port her mortgage, but, wanted to push her into gettin an ISA / endownment or something similiar. I think they may have confused her a little too much. She has 13k left and has another 8 years to go.

May I suggest that you arrange a mortgage in principle for your mum before you get sucked into increasing the offer for the property.

You must first of all decide on the maximum amount that you are prepared to go to for the property and then contact a whole of market mortgage broker to get a mortgage in principle in place.

Then armed with the mortgage go for it but be quick.

JoeK