mortgage for 84 year old?

suzieQueue

Hi

I'm hoping for some quick advice.

My mother wants to downsize from a £300k mortgage free house to a retirement flat for £185k.

We are in a situation where her house is not quite yet on the market and another buyer has jumped in with the same offer who has already sold their house.

The agent has suggested we put together a chain free deal to secure her the flat over the other buyers. He has suggested she gets equity release on her house of £100k and then tops up with her cash to the £185k needed to buy the flat, then put her house on market and sell over the next couple of months, without the need to drop the price for a quick sale, or the stress of being part of a chain.

We have an 'equity release and mortgage expert' coming to see us on Monday afternoon to discuss her options.

I have done some online research and it seems that ER is meant to last until the borrower dies but mum would be wanting to pay the £100k back after the sale of her house.

I am leaning towards seeing if mum could get an interest only mortgage of £100k against her house, pay the interest each month and then pay off the whole mortgage inc Early redemption fees of say 5% once her house is sold in say, 6 months time.

She is 84 years old and has a combined pension of £33k and savings of £107k.

I have a local IFA who I will be emailing the query to , ready for him to see Monday morning so that we have a back up plan in place in case this 'expert' is only interested in selling her ER on Monday afternoon. Unless we have a financial plan in place and on paper before the end of Tuesday she will lose this flat to the other buyers. For many reasons this is the ideal flat for her and the first suitable one that has come on the market in the 12 months I've been searching.

Please can someone reassure me that this set up is viable? Not sleeping at the moment over this.

Many Thanks for reading this to the end and grateful for any advice.

haras_nosirrah

There are retirement interest only options now on the market which may be more suitable than equity release

suzieQueue

Thanks for your reply.
Yes I thought so too.

Lots online so I'm hoping my IFA will pull something out of the bag for her pretty quickly.

The ER route seems to be geared towards the longer term and mum has a good income which she can use to pay a monthly interest only mortgage, certainly for a year or so until her house is sold.