A bit of advice needed about remaining mortgage

minigav

Hi everyone
I am writing this post on behalf of myself & my parents. My parents have a mortgage with £19000 remaining & have been offered a settlement figure £4000 less if they can raise the funds. It looks like the mortgage company want it off their hands, I suppose as it's such a relatively small amount to be left to pay. My parents are 66 & 64 years old. My Mom is retired & my Father is semi retired & about to get his pension in May. I still live at home, work part-time (30 hours per week) & pay rent/housekeeping money each month. I have a small loan I got to pay for my car & a credit card which I am paying off so I can't really borrow more money myself.

So my question is what is the best way for us to raise the money?We thought of a bank loan, but because they are both pensioners I'm not sure their pension would count as income. We were thinking of equity release as we could also do with some extra cash to pay for some repairs to our garage roof & some general maintenance. I'm not really sure of what to apply for, or if there is a way to transfer the mortgage somehow. We could do with some advice from someone with some knowledge in this area.
Thanks in advance for any replies:)

ACG

Pension should count as income.

There are mortgage lenders with free legals and free valuations who may accept your parents. A loan could be an option, but you need to look at he rates available and whether it would be worth doing. You may be saving £4k but if the rates on a new mortgage are higher then it may make them worse off.

Do you understand the downsides of equity release? Based on what you have said, I am not sure it is the right option personally - but dont hold me to that as I am not qualified to advise on Equity release.

minigav

Thanks for the advice. I thought the same about equity release. It seems like a bit of a honey trap to me. I think it would be best if they made an appointment to arrange a loan with their bank. The online calculators seem to think they have a low chance of acceptance. Which is strange as they both have a pension, plus the money I contribute to the upkeep of the home.

Silvertabby

I doubt the bank will take your contributions into account - you could move out tomorrow.

Thrugelmir

Who is the lender in question?

getmore4less

What is the current rate and payment and term.

minigav

The lender is ITL Mortgages & the original payment term has expired. We are currently paying £200 per month. I thought the bank may not count my contribution, but I thought they could possibly class me as a dependant & maybe assume I didn't contribute at all.

getmore4less

interest rate?

£200pm won't be enough to cover many alternatives, what is a realistic max you could afford between you.