Getting mortgage in 70s

Sharkboy

My mother is 72. She has a mortgage of c.£120k and a house worth £160k.

I would like to buy it off her as a buy to let but I understand this is not possible if she is to remain in the property.


Are there any mortgage products available to over 70s that can allow to extend her mortgage for a few more years?

The current mortgage company won't extend it based on her pension income.

Would it make a difference if I were to become the joint owner or act as a guarantor?

ACG

Its not impossible. You would need a regulated buy to let.

The criteria may be a little different (having never done one im not 100%).

holly_hobby

Most lenders will not permit any type of mge and the vendor remain resident post completion, either a residential mortgage or a regulated buy to let (which essentially would equate to a sale and rent back agreement) - as this is in respect of beneficial ownership and vacant possession issues which prejudicies the lenders position.

If her income is not sufficient to support borrowings, then seeking a traditional residential remortgage in her sole name is out.

Her LTV is also too high for a lifetime mortgage arrangment.

Why does she need to seek an alternartive mortgage - is this driven by the fact that she has an interest only arrangement with no repayment vehicle ?

Hope this helps

Holly x

PS - Regulated BTL affordability is based on the appliants income not rental receipt (unlike traditioanl un-regulated BTLs). This is due to their regulated status, and the resulting FCA directive of lenders having to demonstrate appropriate affordability assessments were conducted as part of the UW process.

Sharkboy

Yes. She has no repayment vehicle. She is paying interest only. I suppose the repayment vehicle would have to be the sale of the house.

So, there are really no options available given her age and the LTV?

There is nothing we could do whereby it could be a joint mortgage between me and her, or I could be a guarantor?

holly_hobby

If you became joint owner (under a transfer of equity) and your sole income (including all other commitments and mge) wouldn't be adequate to service the mortgage, then you'll continue to struggle to find a lender to accept, as the max term is based onthe age of the oldest contributing applicant. If Mums income isn't reqd, then this will make things a tad easier, with the term being based on you, not Mum.

If her income is needed, there are 1 or 2 lenders whom don't have an upper 75 yrs ceiling.

The exercise would be a transfer of equity (adding you on) and simultanteous remortgage (if you also moved lender) which assuming you and mum both have a healthy credit record, with no adverse, it is a possibility - although with no repayment vehicle, you will find that the new arrangement will be on a repayment basis ie no longer interest only.

There won't be any SDLT as the effective value of tsf will be below 125k BUT you will be subject to CGT on laer sale (which may be mitigated by qualifying reliefs/exemptions).

Deprivation of asssets may (depending on various factors)be cited by the local authority, should mum or her reps, later seek assistance with long term care fees.

If you believe your income and both credit historys are suitable - then I suggest you engage a broker whom will be aware of suitable lenders I've touched on.

Hope this helps

Holly x

Sharkboy

Also, what LTV would she need for a lifetime mortgage to be realistic?

I could probably get the LTV down to 65-70%.

holly_hobby

Still way too high, you're looking circa 40% as an absolute max - so you'd need to reduce the current balance by £60k+ - which may break the bank a bit !

Hope this helps

Holly