Best course of action for 64 year old moving house

Beans27

Hi all


Wondered if any of your knowledgeable people here have any advice on what you think would be the best course of action.


My mum (64) is looking to move over near me. I currently live an hour or so away, and am due a baby in April. My mum is adamant that she wants a 'fresh start' and to be a hands on Grandma, and as such wants to live nearer to us.


She currently has a mortgage - there should be about £60k equity in the property based on valuations and sold prices in her area. (She currently still owes £90k on the mortgage after years of paying interest only, which is a different concern since the mortgage only has a few years left to run).


She doesn't want to rent - but I am struggling to see a way she would be able to purchase something else. Prices are similar over where I live, not significantly higher or lower.


She's comfortable with getting a 2 bed place - we had a look at a couple of 1 bed flats but she can't see herself in somewhere with so little space (although she is on her own, there is going to have to be compromise somewhere!!).


The other avenue is shared ownership (I know this isn't the preferred way of buying on this board, but she'd get a house for a lower amount than renting a month?).


I don't know whether there are specific mortgages for people over 60 (would it be possible to get a mortgage for say £40k?). She's also talked about before me or one of my brothers getting a joint mortgage with her....I already have a mortgage with my partner so not sure whether I earn enough to do that.


Any thoughts/ advice much appreciated.... I am a lot more cautious than my mum and don't want her throwing herself into something then regretting it. Thanks

Hoploz

What kind of money would she need to buy the smaller place near you? Still a large mortgage? Or would a smaller shorter term loan cover it? Could you or a relative cover it with an extension of your own mortgage? Does she have any income from employment? How is she paying her mortgage? Does she have a pension pot due sometime?
So many questions.

If she is genuinely unable to finance a new purchase then perhaps she could 'let to buy?' Rent out her place to cover the mortgage and maybe a bit extra towards her new place?

TBagpuss

How much is the shortfall? (i.e. how much more than the £60K equity would she need in order to buy somewhere?)

She would then need to talk to a mortgage advisor about whether she has any borrowing capacity, based on her current income. I belive that some lenders will lend up to age 70 but I'm not sure if they will do that where that would be for so short a period of time.

She might be able to get an equity release mortage but they tend to be an expensive way to borrow money and could also make it very hard for her to move again, if she needed to.

If you or another sibling were able to do so, you could lend her the money and secure it by way of a private charge (mortgage) over the new home. Dong it as a loan rather than as shared ownership may be better as it is less complex, and it avoids things such as you becoming liable for CGT and for the extra staff duty on second homes.

Shared ownership might work for her - the disadvnatages are that such properties may (dependeing on area) be harder to sell than a wholly owned propert, and you do tend to have some of the disadvantages of enting with the responsibilities of being an owner, but it may be the best choice for your mum.
It sounds as thoug hshe is going to have to do something soon whatever happens, becuase of her mortgage situation, so its not a case of her moving for you.

Beans27

Thanks Hoploz, I'll try and answer those questions!


I think she could probably get a 2 bedroom house around here for £100k. So I'm not sure whether a bank would approve a loan for £40k at 64....sounds quite high. That's why I wondered if any banks do shorter mortgages for those in their 60's?


Me with an extension of mortgage - I don't know to be honest, not something I know about. We have a mortgage of £180k on a £225k house - so unsure how one would go about extending it, or whether that would be enough equity. No one else has a mortgage in the family.


Employment - yes, she is a receptionist full time at the moment, plans to get something 3 days a week over here ideally. This is how she currently pays her mortgage.


Pension - I don't think she has any private pension provisions to be honest, so will be relying on the government amount.


Let to buy - not something we'd considered, I suppose she could look into that, depending on what the mortgage provider said.


Appreciate the question is a bit how long is a piece of string - but useful to get ideas we might not have thought of!

Beans27

Thanks TBagpuss - think I covered most of those in the response I just did. Yes I agree - she will have to do something in the next 6 years in any case, as presumably the bank will be knocking on the door when the mortgage terms ends.....:(


I think her best bet is to go and see a mortgage advisor and ask about her options - which I have been telling her to do for the past few months!

Hoploz

Definitely!
But make sure it s an independent advisor. If she just pops in to her own bank she may not get the full picture of all the different options available from a variety of sources which may include lenders who specialise in people in her situation

bouicca21

Are there any retirement flats near you? They are usually (in my area at least) 2 bedders and relatively speaking cheap to buy (though the annual costs tend to be high).

Hoploz

There are some beautiful mobile homes for the over-55's around here - another option. They are cheaper than bricks and mortar but not mortgageable I believe

brewthebear

I am same age and would have thought she would have no chance of borrowing that amount plus when and if she does move would doubt wether she,ll find a job as she,ll be more or less 65 so its a no goer which ever way you look at it

Beans27

Bouicca21, thanks, yes there are quite a few retirement flats....I thought that, I think she has some negative perceptions of what that would be like....if we could find one for a decent price, might be worth a look.
Hoploz - funny you should say that, going to see one of those tomorrow! It looks lovely, and she could get it outright - service charge seems quite high at £3k a year?
brewthebear, I worry that she will struggle finding a job as well - but she is nothing if not determined, and I'm sure would harass someone into employing her :-D

AlexMac

Who's mum got her existing mortgage with? We moved in 2011 at the age of 64 and were pleased to be reminded that our Nationwide Home Loan (which we'd had for several years) could be 'ported' to the new property on the same advantageous terms. Even better, they agreed it could be extended by £50k 'additional borrowing' on good, albeit less advantageous terms; the best deal at the time- about 3%. The 'even bestest' news was that they confirmed the loan could run til we were 75!

Mortgages have become much harder to get since then but it might be worth trying to find an equally sympathetic lender (we were lucky enough to originally opt to be with a Mutual rather than a greedy b4sted merchant 6anker style of bank) .

As regrds the well intentioned advice...

bouicca21 wrote: »

Are there any retirement flats near you? They are usually (in my area at least) 2 bedders and relatively speaking cheap to buy (though the annual costs tend to be high).

.. nice idea, but given that I still manage a bit of gentle mountain walking even now, at the age of 68, I'd have told my kids where to stick advice like that!