Secured loan for 70 year old pensioners

Goldenold

My husband and I are 70 years old. We own a house which has been valued at £475,000. We have purchased a 2-acre site in a village and have all consents in place and the builders are due to start work next week. In order to buy the land and build the house, we cashed in all our pensions. Once we have sold and completed the build we should have £300,000 put back into our pensions and the balance towards finishing and furnishing the house. We have cash to build the house, however, we need an extra £50,000 in order to complete the house to a state we could move into, so we can sell our existing house! All the sites I looked at, won't lend more than £15,000 on a short term mortgage for our combined pension income of £20,000. We have no mortgage on either house. Short term loans I have looked at seem prohibitively expensive, which is why we are looking at interest-only mortgages. At present the property market is good, with houses in our area selling quickly, however, even if it takes a while to sell we can rent it out for about £15,000, so servicing any loan/mortgage won't be a problem. Any ideas who we could approach to borrow this money for a maximum of 2 years and a minimum of 6 months?

Exodi

I'd contact an IFA personally.

DCFC79

An IFA would definitely be a try.

Nearlyold

Have you considered selling your existing place before/while your new place is built? On a 2 acre site they'd be plenty of room for a rented static for you to live in while your new house is finished.

macman

You can't put money back into a pension once you have withdrawn it. What about the tax you will be paying on the £225K (75%) of your pension pot that will be subject to income tax at your marginal rate? Which could be as high as 45%.

Goldenold

You are absolutely correct, we have had to drawn down our pensions over the past few years to avoid falling into the 40% bracket. I did not make it clear, we do not wish to put the money back into a pension scheme but in some sort of investment that will produce an income to subsidise our state pensions, At our age and with our health problems and do not think we could face a static caravan and the disruption of putting everything into storage!

jonesMUFCforever

Sell your house with the land and planning and buy somewhere smaller and cheaper.

Clive_Woody

Goldenold wrote: »

You are absolutely correct, we have had to drawn down our pensions over the past few years to avoid falling into the 40% bracket. I did not make it clear, we do not wish to put the money back into a pension scheme but in some sort of investment that will produce an income to subsidise our state pensions, At our age and with our health problems and do not think we could face a static caravan and the disruption of putting everything into storage!

How about selling then renting an unfurnished property while you are waiting. Not the best use of your money but then a short term loan will not be cheap either and possibly may not be possible.

Goldenold

Thanks for the replies.