Bridging loan for OAP

c1834be25

Hi,

My Dad is mid-seventies and downsizing. His plan is to buy the new place, fix it up and move, and then sell the old place. He is interested in getting a loan to cover part of the cost of the new place until he sells the old. The amount he is looking to borrow is around 30% of the value of the house he will eventually sell, and he'll repay once the sale goes through.

My thought is that he really wants an interest-only mortgage with no (significant) early redemption fees. Is that going to be possible? Any lenders known for offering loans to this age group?

If not, then where best to look? (He has received an offer of a secured loan from his bank, but the proposed fees are very high -- seems unreasonable given the low risk associated with a 30% LTV).

Thanks!

ACG

There are lenders who will offer mortgages without early repayment charges.

Might be worth a chat with a mortgage advisor.

c1834be25

Thanks. I guess my main questions are:

1) Are standard mortgages available for this scenario (OAP and short term), or does this need to be some different type of loan? ie. Do we go to the usual mortgage providers and advisers, or someone else?

2) Is it inevitable that fees will be much higher than for normal mortgage scenarios? (Risk is very low, so not obvious to me why high fees are being asked).

Thrugelmir

What do you regard as high fees?

Fees are set to price business i.e. lend to those who wish to borrow more.

ACG

Mortgages are available for people until their 75th or even 80th birthday... subject to criteria being met. So a normal mortgage is a possibility.

Upfront fees will be charged if there are no ERCs on the product, they will be higher than some of the deals on the market and lower than others. But the fees are there as the money is being lent at a low rate, if you pay it off within the space of a year or 2 then they make very little or even lose money as it takes them a few years to earn back their cost base (ie underwriters, administrators, sales people etc).

Let_Us_See

Start at the beginning! Does your father have a guaranteed income (pension income included)? If not, then at his age it is probably a non-starter. However, if he does, post a breakdown, and you will receive far more detailed and accurate advice.