House purchase for over 65s

Hotglove

Hi,
I'm 67, wife is 61.
We currently share a rented house with my daughter 31, and granddaughter aged 2.
I am still working for employer of last 40 yrs and intend to work for at least 3 more years.
I have 2 index linked final salary pensions in payment plus an annuity, plus my State Pension
Wife and I own a shop, which is run by her, with a flat above which is let, I own a house on a BTL mortgage which is let and my wife owns a house which was her parents.
We now wish to buy a house for all of us to live in and are looking at the options.
We want as low a repayment as possible, the total equity of our current properties, based on recent valuations, is £625k.
We would like to buy at around £450k, and were thinking of selling the inherited property (£150k) and looking to borrow £300k
Our daughter would be interested in a joint mortgage and has recently had fairly large salary increase, but is a partner in a recruitment company that has only been running for just over a year.
Options seem to include remortgaging the BTL (but current deal is v. cheap) taking out a mortgage on shop and flat (but commercial interest rates are higher) or obtaining an interest only residential mortgage on the new property.
The advantage to borrowing against existing property is that we would be cash buyers of the target house, so could look at auctions, renovation projects, etc.
Any advice very welcome.

Rain_Shadow

Hotglove wrote: »

Any advice very welcome.

Don't buy a house jointly with your daughter.

hazyjo

My mortgage provider would only give me a mortgage up to age 64 (I was early 40s at the time), although there are some out there up to age 70+. You'll prob find they're for youngsters though, it's prob unlikely they'll be giving you an 8-14 year mortgage at your ages. Perhaps speak with an all-of-market independent mortgage adviser (come back and tell us as it's helpful for the board).


Agree with Rain Shadow. If she wants to continue to live with you, fine, but I'd not be buying together. Can of worms...


You'll find that auction properties often have something wrong (or compromised) with them (eg short lease, tenants, non-standard construction) so be careful going down that route.


Jx

rtho782

Straight away, day 1, you pay £13,500 in additional stamp duty as you are not replacing a main residence and are buying a home while you will still own one.

Just sell both the existing houses and buy one outright with no mortgage.

Hotglove

Thanks for the input,
If we sell two houses we would end up with about £250k which would not buy much in our part of the world (Kent)
We would also lose £900 pcm rental income.

The empty house is a bit run-down, so another alternative would be to either take out a BTL mortgage on that property or remortgage the existing BTL and use the extra funds to improve empty house and let it.

To refurbish and let empty house would rob us of the deposit, but we would gain another £900 pcm.
If it was not for the tax on rents we would consider long-term renting, perhaps from an organisation like the National Trust or similar.

Hotglove

Just to add one point, we have found a lender who would consider a mortgage term of 18 years.

hazyjo

Hotglove wrote: »

Just to add one point, we have found a lender who would consider a mortgage term of 18 years.

You want a mortgage until you're 85 and 79?! A £300k one at that?! :eek:


Jx

JP08

A few years back (quite a few actually - pre financial crisis) an ex work colleague of mine took out a mortgage at the age of 66 on a "bachelor pad" as a result of divorce.

Rules might have changed, but he reckoned at the time he was spoilt for choice for lenders.
And why not ? With an Index linked final salary pension that was well north of 50k and a chunky deposit, his position to pay it was far more guaranteed than anyone in current employment.

hazyjo

Maybe I'm just pessimistic/cynical after losing lots of family and friends/their relatives in their 40s/50s/60s and 70s!


I suppose if you don't have to work, it's okay... I still wouldn't personally like it though.


Jx

fairy_lights

What happens if your daughter gets a new partner, would you be happy for them to move in? Or if she wants to move out, you could end up lumbered with a house much bigger than you need.

melanzana

Is there any reason not to do up inherited house and you live there, and let daughter have the flat above the shop or vice versa.

Then you still have the rental income from BTL.

But I may be missing something.

There is NO way I would enter into a joint mortgage like this, and with respect due to your age profile as a factor also.

Retire, relax, enjoy.