Mortgage for the over 80s?

BML

I would like to add a floor to the bungalow I live in so I can fit my children in when they wish to stay and have no idea what it would cost but whatever it is I doubt that my savings would cover it. As a realist I recognise that I may not survive long enough to pay a loan off so does anyone know of a trustworthy organisation that offers such loans. I did find the following on the Internet and 2.9 looks generous!
Specialist Mortgage Advice. Save Money & Great Low Rates. Contact Us Now!
Types: Interest Only, Capital, Buy To Let, Right To Buy, Residential, Expats, Self Employed, Foreign Nationals
Exclusive Deal No Max Age - 2.99% Interest Only

amnblog

Please do not respond to an advertisement like the one above.

Adding a floor sounds like a major job, are your footings deep enough for another floor? Will you get planning permission?

BML

Maybe I should have said that prior to going to university thereby becoming unemployable and having to go into Human Resources Management I served an apprenticeship as a Bricklayer. I also had an extra floor added to the last place we lived which was a great adventure. In that case we had a series of steel post set into the ground with other steel post attached to them laterally to provide a secure structure to build on. The group of bungalows along the road where I live have all had extra floors added with the exception of mine but now I need the extra space.
Why did you advise not to respond to an advertisement like the one I mentioned?

kingstreet

This could be a good reason;-

There will be a fee for our services, the precise amount will depend upon your circumstances, however we estimate that it will be £1495 in total and never more than 2% of the mortgage amount. The fee is typically payable £495 upfront with the balance due immediately on completion. The fee will be refunded if we fail to secure you an agreement in principle based upon the information your provide in the FactFind. You will not receive a refund if, having undertaken the FactFind, you provide inaccurate information, choose not to accept our recommendation or withdraw from the mortgage process.

BML

I asked a young friend their opinion and they wrote the following. If it's true I find it horrific and near enough usury.
"Anyway. These loans work on compound interest which means that the longer you have it, the more it costs in interest. and they usually put the fees onto the loan."
To put it simply..
You get a loan of say £20K with fees of £500
year 1 = 20500 + interest = 20125
year 2 = 2012.5 + interest = 21537
3 = 22076
4 = 22628
5 = 23193
6 = 23773
7 = 24368
8 = 24977
9 = 25601
10 = 26241
11 = 26897
12 = 27570
13 = 28259
14 = 28965
15 = 29960
If you were to get 30k plus 1k fees and 5% interest after 10 years it would be £50495!!!!
So it kind of works if you only have it for a short while. but if you happen to live for a little while longer then the interest goes up exponentially!
Some people who have released equity from their homes in their 60's have found themselves in negative equity :-(
Also because the bank essentially owns part of your home, you are not allowed to move house. If you try then the fees are astronomical!
I would welcome coments on this.

dimbo61

If you are over 75 then your " kids " are adults and hopefully own a property of there own ?
Now if you said you had become legal guardian of the gran kids then by all means build the dorma bungalow you need the extra bedrooms and bathroom.
If however the kids will only visit once or twice a year then find the local travel lodge number.
You will struggle to get a mortgage when retired so this will be a Very Expensive Equity release rip off

BML

I vaguely remember my old mortgage which when we were sent an annual review always looked as though we were paying it off very slowly but I'm sure it did not include compound interest so why doesn't government protect us from these thieves?
Surely there must be an honest mortgage vendor somewhere or do I have to become a Muslim?

fewcloudy

BML wrote: »

Surely there must be an honest mortgage vendor somewhere or do I have to become a Muslim?

Huh?

Maybe time to put the keyboard back in the cupboard for the rest of the day... get the kettle on, have a couple of digestives, and stop worrying about this.
And I'm sure your "young friend" has got better things to do with their time than write out examples of compound interest for you...

Nasqueron

fewcloudy wrote: »

Huh?

Maybe time to put the keyboard back in the cupboard for the rest of the day... get the kettle on, have a couple of digestives, and stop worrying about this.
And I'm sure your "young friend" has got better things to do with their time than write out examples of compound interest for you...

OP is confusing Sharia compliant mortgages with interest free loans. Sharia loans still pay interest, it's just dressed up so it appears to not be.

BML

With the greatest respect I came to this forum looking for advice and it has not been given so I will look elsewhere which fills me with trepidation because of the poor reputation this area of business has but advice I will find and build another floor I will do.

kingstreet

Consult an Independent Financial Advisor, as you are likely to need advice from someone with permissions which extend into lifetime mortgages.

For anyone else reading this, this doesn't mean an interest roll-up scheme, just mortgages for older people.