Mortgage for 79 year old?

dunstonh

capwhitt wrote: »

Its not sale and leaseback. Its a gift then leaseback. Take the house as a gift then get a BTL mortgage. Some banks won't let you do this with family members but some will.

See this thread:
https://forums.moneysavingexpert.com/discussion/4442063

That has major tax implications. It doesnt avoid IHT as its a gift with reservation. The house then becomes subject to CGT on sale.

Many lenders do not like buy to lets to family members and the interest rate on BTL is not too dissimilar to equity release.

Let_Us_See

capwhitt wrote: »

Take the house as a gift then get a BTL mortgage. Some banks won't let you do this with family members but some will.

This would not work for several reasons, not least as father is current resident.

Lifetime mortgage appears only option and rates ARE competitive.

amnblog

What do the equity release mortgage rates 'prohibit'?


The don't prohibit him staying in the property, or getting his £50,000.

valerie57

Thanks for comments, very helpful. The reason for 'prohibitive' is that on my understanding the lifetime mortgage option would mean that the interest is compounded rather than allowing payments to be made. Not bad if you die quickly but hopefully there are many years left!

missbiggles1

valerie57 wrote: »

Thanks for comments, very helpful. The reason for 'prohibitive' is that on my understanding the lifetime mortgage option would mean that the interest is compounded rather than allowing payments to be made. Not bad if you die quickly but hopefully there are many years left!

But nowadays it doesn't matter if the debt exceeds the value of the house as this is cleared on the death of the borrower so your fil can live as long as he likes with no worry about it.

silvercar

valerie57 wrote: »

Thanks for comments, very helpful. The reason for 'prohibitive' is that on my understanding the lifetime mortgage option would mean that the interest is compounded rather than allowing payments to be made. Not bad if you die quickly but hopefully there are many years left!

The only downside is that there is eventually no equity to pass on.

But if the offspring are looking to protect future inheritance, then their option is to loan £50k to parent as a loan repayable (with interest if they so agree) on death.

Let_Us_See

valerie57 wrote: »

Thanks for comments, very helpful. The reason for 'prohibitive' is that on my understanding the lifetime mortgage option would mean that the interest is compounded rather than allowing payments to be made.

There are lifetime mortgages that allow the interest to be paid monthly and therefore the balance remain stable. However, they are affordability based and adequate guaranteed income must be available. Rates start around 4.75%.

GunJack

struggling to see what a 79-y-o would need £50k for, or is it just me??

Might it have a bearing on how to finance the sum?

buglawton

This in last week's Telegraph:
http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/11686590/I-got-a-mortgage-aged-92-tide-turns-for-older-borrowers.html
lots of solid reasons for the old to get a mortgage, and specialist lenders do exist.
But the scenario has got to be, borrower has assets, income and a plan.

Let_Us_See

buglawton wrote: »

This in last week's Telegraph:
http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/11686590/I-got-a-mortgage-aged-92-tide-turns-for-older-borrowers.html
lots of solid reasons for the old to get a mortgage, and specialist lenders do exist.
But the scenario has got to be, borrower has assets, income and a plan.

Adviser's are well aware of these options and placing such clients with lender's has never been, and isn't, a problem.

Unfortunately, most retired people seeking help do not have a plan due to insufficient assets and income!