loan or equity release or???

bradrock

Hi all.

My father in law inherited a bungalow about a year ago. It's worth 130...140k roughly. Been on the market 10 months isn't selling in its current condition. It needs 20k spending on it which is what he has been quoted go do it up. He's 69.
What is the best way to get 20k if any please. It's mortgage free.

Thanks

Tixy

Is he intending to do it up just to improve his chances of selling it on?

Is he currently earning? or what is his pension income?

Mojisola

bradrock wrote: »

My father in law inherited a bungalow about a year ago. It's worth 130...140k roughly. Been on the market 10 months isn't selling in its current condition. It needs 20k spending on it which is what he has been quoted go do it up. He's 69.

If he reduces the price to make allowance for the work that needs doing, it will sell.

bradrock

Yes spend the 20 on refurbishment to sell it straight on.

He's 69.
Full state pension.
150 a month in other pensions.
Works for agency earns roughly 10k per year but this is not guaranteed.

bradrock

Mojisola wrote: »

If he reduces the price to make allowance for the work that needs doing, it will sell.

Already been reduced by 15k. Plus all the viewers so far have said it's to much work to bother buying and it was his father's house from 1934 so he doesn't want to let it go for a lot less the it's worth.

Tixy

So how much has an estate agent advised he should reduce it by now to sell it in its current condition? i.e. what its worth currently.

And how much have they advised it would sell for if he borrows £20k and does some improvements?

It sounds like he doesn't have the income to get accepted for an unsecured loan, so he'd be looking at trying to get a mortgage on it. A few lenders might consider a short mortgage at the age of 69. But by the time he has paid fees & interest I'd be surpised if this was a better option that just reducing the price now.

bradrock

They have said it would worth around 190 200k when done up as identical ones have sold for that price recently but they say prob 100 110 as is.

Tixy

What has he been trying to sell it at?

I wouldn't even consider equity release (as in home reversion).

A lifetime mortgage might be an option to explore (where interest is rolled up until repaid but you retain ownership of the property).

Or possibly look in to a bridging loan - although I am not sure they would lend as little as £20k. Both are expensive forms of finance usually.

Remember to factor in the tax liability on any profit he might make when deciding whether its financially worthwhile to do the renovation.

bradrock

Started it at 160000 bin 140000 for a while now.

bradrock

He mentioned equity release but surely would be to expensive at least that's what I told him from a quick Google search.

Mojisola

If you're feeling brave, you could post a link to the house on the House Selling board and people will give advice about to make it more saleable.