Interest free mortgage for over 50s

FeeGee

Hi there.
I'm hoping someone out there may have some advice for me. My partner and I have been living abroad for the last 7 years but due to elderly parents in the UK have decided it's time to move back.:(
We have a property worth £300k to sell abroad and typically this is likely to take 18 months - 2 years to realise. We are currently mortgage free and my partner has a pension of £22k pa and I have an income from rental of the self-contained apartment on our property of £5k pa. We have no other debts (not even a credit card balance!) and can raise £30 - £35k by way of a deposit.
Our preferred option at the moment is not to wait for the property here to sell, but to rent it out (expected income would be approx £15k net pa) and return to the UK and buy. We have seen a couple of properties we like around £160k.
So we really need to know;
1. Are we likely to be able to get a mortgage to cover the purchase?
2. Better still we would prefer an interest only option to be repaid with the money from our sale here (to keep the repayments lower) - are there any available for over 50s?
3. Can the potential income from renting out our overseas property be taken into account in our income when applying?
4. Has anyone got any recommendations on the best lenders - or would we be better seeing a broker?
Thanks in anticipation!

kingstreet

Do you have a credit identity in the UK? On the electoral roll? UK bank account?

If you haven't been back long, you may find you aren't on the lenders' radar yet.

FeeGee

We both have UK bank accounts into which my partner's pension is paid and my income from the property (it's a holiday let) although we are not on the electoral register we have maintained UK addresses through family. We both have UK credit cards (with balance paid off each month). Not sure where that would leave us with regards credit rating as we have been mortgage/ debt free for 8 years now.

Thrugelmir

Have you proper accounts or tax returns for the holiday letting income?

dimbo61

You maybe better off coming home and renting for 6/12 months and looking for a place to buy!

Standy

dimbo61 wrote: »

You maybe better off coming home and renting for 6/12 months and looking for a place to buy!

Whilst this may or may not be true, the problem always is that you never really know what each and every lender does and does not consider in such cases. If the sources of income are as stated, then what significance is there in having rented in the UK? btw, I am only asking, not disagreeing with you, to try and get better clarity:)

holly_hobby

Your UK addresses will be those for your credit cards, which I imagine will also be noted as your place of residence when you return ?

Interest only - this is a reducing pool for new business, although there are still some lenders in the market. In general you are looking at a LTV below 75% (although this may be reduced between lenders, if you are utilising the sale of an unencumbered 2nd property).

Income from the holiday let (if unencumbered), and if let throughout the yr, with solid history, may allow the income (or at least part of it) to be considered, but a lot will depend upon the market it operates in, any seasonal unoccupancy, your LTV and the UWs view of its longterm sustainability.

You're best approach IMHO, is to firstly arrive back home in blighty, gather your credit ref reports (experian, equifax and callcredit), with your proof of income (pension and rental), and spend an hour or so with a whole of market/independent mortgage broker.

They will be able to ascertain if there are any current lenders for you (given the residency and IO/repayment vehicle situ), and if so what the max available mge will be given your sources of income. Your max term will be generally capped by the oldest applicant reaching 75 yrs.

Just be mindful that lenders may actually want you to have been back in the UK for at least 6 mths pre application - so your initial appointment, will really be a "suck it and see exercise" - to give you an idea of whats currently do'able and whats not.

Don't forget to also consider how the mge will be repaid if either of you die before the overseas property is sold (although your broker will discuss this with you).

Anyhoo, hope this helps a little ...

Holly

FeeGee

Thanks for the input everyone.

We have accounts for the holiday let income, yes, but no tax returns as the income is below tax threshold (this is my sole income)

Sorry if this is a completely dumb question but what would be the benefit to renting somewhere in the UK? We've never considered that as an option because we've always viewed renting as "dead"money.

dimbo61

When you move back to the UK where do you plan to stay?
family or friends?
Now even with the best will in the world I think you would be looking at 3/6 months to find and buy a property!
What happens 6 months after you move in if you hate your new home, location, neighbours, new job means you have to move area.
Lots of rental properties in most areas and if you do not like the place then move out after 6 months.
Give yourself time to check out the area you want to live in.
Find the right place and sort out the legals,searches, surveys ETC
While renting you can get your names on the electoral roll, pay the gas/electric/water/broadband bills etc.
Set up a credit card and pay every month.
Build up a credit history back in the UK
Marry in haste and repent at your leisure so why the mad rush to get back on the property ladder.
London seems to be the only place in the UK where prices are rising fast

kidmugsy

FeeGee wrote: »

we've always viewed renting as "dead"money.

People keep saying this - what on earth does it mean? You either rent a property or you rent the money to buy a property.

FeeGee

When you move back to the UK where do you plan to stay?
family or friends?
Now even with the best will in the world I think you would be looking at 3/6 months to find and buy a property!
What happens 6 months after you move in if you hate your new home, location, neighbours, new job means you have to move area.

We know the area we want to move back to very well. I grew up there and my partner worked for 30 years in the same area, so that's not really going to be an issue for us. Nor is moving for work.
Basically we can't move in with family - they just don't have the space.
We have seen two properties we really, really like, so the issue isn't about renting (sorry if I'm shooting anyone down in flames here!) but IF it's possible to get a mortgage so we can buy the house we want BEFORE we sell this.
We haven't moved back to the UK yet. We are coming for a visit in April and were hoping to be able to get the ball rolling on a purchase. We would then need to travel back and forth for a few months, but it would be nice to have a base in the UK to do this.

Set up a credit card and pay every month.

We do already do this, but I guess from what everyone has said that in the first instance we should look at getting a credit report?