Interest free mortgage for over 50s

dunstonh

We've never considered that as an option because we've always viewed renting as "dead"money.

Well, buying an interest only mortgage (and I assume that is what you mean rather than interest free) is effectively a form of renting unless you make provision to repay the debt at expiry of the loan, you lose the property.

FeeGee

Thanks dunstonh....yes I did mean interest only (d'oh!) Wishful thinking perhaps?!

We fully understand the potential pitfalls of the interest only situation, but would have more than sufficient funds in our overseas property to pay off the loan (within 2 years given the current market there)Yes, you are right that I/O is in effect renting the property, but the difference (as we see it) is that this is the property that we want, in exactly the area we want at a fantastic price (priced to reflect some updating required) so would be prepared to lose that money to secure it.
We don't feel like that about just paying a landlord for a rental property to live in - in which case we would probably choose to stay abroad for the time being.

holly_hobby

I do think, you will have to actually be perm resident back in the UK before you make any formal mge application, unless AFAIA you are armed forces.

So whilst some trips back may facilitate a look about for whats going, until you're perm relocated back in the UK, I do think lenders may choose to wait, notwithstanding you'll be narrowed for choice a little, by both your IO requirement, and its repayment being reliant upon the future sale of an overseas (and at that point now permanently unoccupied (?) property) .... Which market is this in - because central europe as we know (spain especially), has had property re-sale values hit rather hard over the recent turmoil, which may be something else for the lender to be twitchy about re accepting this as a suitable repayment vehicle.

As I say, on one of your rtn trips, go and see a broker, give him the situation warts n all, with as I've prev stated a copy of your credit reports and proof and source of income,together with details of the os property you intend to sell, what it is to be marketed for, selling agt, and compariable recent sale prices of similar dwellings - as the lender will want to ascertain it is suitable security and will be sufficient to repay the loan, even if sold significantly under price (given any prevailing poor market conditions you may be trying to sell in).

By doing this, you will establish for sure, whether its a no go until you have some current residency history here (ie on the Votors Roll and Proof of Res for at least 6 mths) - or the fact you have current UK credit facilities that have been maintained, albeit apparently registered at an address that you don't live at !?, may well cause more issues than gains (unless the providers knows this is merely a correspondence address).

As I say at the minute, it will be a suck it and see exercise .... but I really think you need to start at least considering the possibility that you may have no option but to temporarily rent, with a view to gaining some repatriation history to support any future app.

As a thought, if the lenders rejects accepting the overseas unit, and if unencumbered - would you consider instead selling the holiday let to achieve what you want ? Or could you live in this for 6 mths to get your residency (although of course you won't have any rental income during that period), but then again you won't have to find the rent to pay on any alternative property you rent instead.

You could of course also initially approach your (UK) bankers, whom already having personal experience and a financial history with you, may be able to be more flexible than a lender whom has no current relationship or dealings with you.

Hope this helps ... I wish you well

Holly

FeeGee

Thanks again holly hobby for another comprehensive response!

We have done some more digging around on expat forums and it seems all is not lost with regards residency status as people in our position have been offered mortgages despite not being resident/ having only just returned from abroad.

With that in mind we have booked an appointment to see an independent mortgage broker on our next UK trip in 3 weeks time. :eek:

TBH it had never occurred to us that residency would be an issue since here in Turkey, the banks actually offer mortgages to foreigners looking to invest in the property market. Fortunately for us, Turkey currently has one of the strongest European economies and a buoyant property market so hopefully lenders would take that into account if we want to use our property here as collateral. Failing that, fingers crossed that we get a quick enough sale that we can still purchase our intended UK property!

holly_hobby

Thats fine ... like to try and cross all the T's if I can to make any post of real benefit.

Ex-pat regs are different to your situation (general critera is central europe, employed by a UK or a multi national company, paid in sterling, with a defined date of repatriation).

Obv that isn't your situ, but the fact you are are a returning UK subject, and are in receipt of sterling income derived from pension and property UK rental sources (if accepted), may as I said earlier cetainly help - but the other variables of an IO requirement, with your RV being a property in Turkey, may well rule some lenders out.

Anyhoo, you'll know more when you see your adviser - don't forget about also speaking to your personal current UK bankers too, to see if they can assist (already having a financial history with you should give you a brownie point or 2).

Hope this helps

Holly

dimbo61

Consider an offset mortgage that way once you sell your property abroad you can put the funds into the offset account and save interest until you are ready to repay the mortgage ( I think First direct still do offset Interest only mortgages)
Only my views not advice GOOD LUCK