Retired House Buying and Selling

medicalman320

My wife and I are 70 years old and own two houses on which we have modest mortgages.

We have pension incomes only.

We would like to free some of the equity from one of the houses in order to improve and enlarge the other house so we can move in and make it our only property, selling the first one and settling the loan. We think we would need the money for about two years.
We have no other available savings and cannot get a new mortgage, re-mortgage or personal loan because we are retired and have insufficient income.
We need a sort of short term equity release plan but do not trust the regular 'till death' plans on the market.
We cannot solve this problem although I would have thought it is a common one.

Our property details are as follows:

BH6 5JZ Current Value £375K – Mortgage £50K
TN4 9SG Current Value £500K – Mortgage £157K

We would like to raise approximately £120K.
If you have a suitable product or any constructive ideas I would be pleased to hear from you.



My email address is Medicalman320@gmail.com

Dave_Ham

Hi,

This will be easy, but not sure about you putting your personal e-mail and post codes online. You may want to re-think this.

Assuming that you only live in 1 of the properties, then achieving a remortgage for the other with that sort of equity will be easy.

Try and get a recommended broker, as you are likely to need one and not the highstreet banks.

All the best

holly_hobby

I read there isn't sufficient income for any resi mge ? (assuming its not going under a BTL, which doesn't appear to be the case, or OP is that the case ? is the property you currently don't live in rented out ?).

OP you're correct re the lifetime equity release schemes, they are NOT for short/medium term financing due to the healthy early redemption penalties.

At your age, typical max mge term on a residential mge will be 5 yrs (save for the likes of National Counties whom have an extended max redemption age), with added complications as you say of insuffient income to support your reqd borrowings.

To that end the only solution I can see (if not let, but both your private residence) would be an investment bank (subject to staus etc) (Conrad is pretty familiar with these I think) or possibly a bridge loan .....

If the property is let, your income and ages are not as important, as affordability is largely based on the rental income, and max ltv of 75% as a first time landlord (notwithstanding some have a min income of 25k), and the requirement for a current mge account.

To which end you could let your current property whilst raising the equity via a BTL equity relese mge, which will fund or start, the updates to your other property, which you could move into whilst the renovations are completed.

Then you could elect to sell the rental property (if you wish), redeeming the BTL mge, and having any surplus capital to complete your works or put to other use.

Property no 1, will also have limited to no CGT liability on disposal - which can be expanded on more if reqd.

The above is the basis of suitable status, and that you are aware there may be early redemption and exit penalites under any mge taken and redeemed.

And I would recommend that you perform any such exercise via a whole of market broker (which most, but not all, BTL mges are available through.

Given your ages, ensure your wills are updated too as part of the process.

Hope this helps

H