Retirement Mortgage

albepi

I'm 61 and my wife is 56 we have both been unemployed for some time, we are currently living on a pension of £12,000 pa Gross. we have a mortgage of £100000 on a property valued at £180000.
We have been using our savings which are almost depleted to make mortgage payments.
What I would like to do is sell the house and downsize but would still need a mortgage of around £40000, I asked an adviser about interest only mortgages but was told I would need an endowment to repay the loan at the end of the period.
What I would like to do is either take out a lifetime interest only mortgage or a an interest only mortgage and nearer the end of the the term take out a lifetime mortgage if necessary. Can anyone tell me if either of options is possible or what if any alternatives are available.

dimbo61

Sell up and rent a one/two bedroom flat or bunglow from a housing association!
How can you afford to live and pay a mortgage.
My Dad sold his old expensive to run house and moved into sheltered housing, only half a mile from the town centre. He loves his one bed flat, and has joined the community where he lives.
You would have money in the bank and income to pay the rent while not having the worry of fixing the roof or cutting the grass.

Let_Us_See

An endowment is only one method of paying the capital on an interest only mortgage. However, in your current predicament I believe it will be virtually impossible for you to obtain an interest only mortgage.

Whilst you both qualify age wise for a lifetime mortgage, the amount of lending available at this stage would be around £36,000 and clearly not enough to assist with your current plight.

Apart from downsizing (and this may not even be an option) all I can suggest is that you keep trying to reduce mortgage balance in the hope in later years the balance may be low enough for a lifetime mortgage.

holly_hobby

Are you in reciept of pension credit ? Or income support ?

If so, have you applied for SMI assistance ? (which on a mge of 100k, will meet the entire mge interest)

Have you ensured you are in recipet of all qualifying (inc Means Tested) benefits ? (to which the equity in your primary home, and a certain amount of savings is excluded from the MT assessment)

Have you ensured that you are in receipt/claimed all available pensions (ie those accrued with prev employers, and of vesting age, that you may have forgotten about ?)

Other than that, your current LTV (with respect to your ages) is much too high for any lifetime mortgage arrangement.

And whilst there are a couple of traditional mge lenders whom don't have a restricted upper age limit (which would help if you went on repayment basis), on an IO arrangement the provider will still require you to have an independent (of selling the house itself) repayment vehicle - with of course affordability also based on acceptable income, be that earned, pension or receipt of some benefits (of which income support is not one).

Finally, have you considered selling up and using the free equity re going into a shared ownership arrangement ? Which will retain your security of residence due to your part ownership (notwithstanding rent responsibilities) ? (in fact my in-laws did this after down scalling (5 bed detached), and absolutely love their new little bungalow - which surprised us all, so it may be a solution for you guys too)

Do wish you well ..... but I also believe selling up is the only real solution to the current situation you find yourselves in

Hope this helps

Holly xx