eting a mortgage at 72/73

pauline123456

my mother is looking at buying a property with a pension lump sum she is 72 , she currently rents .
she wants a bungalow and as a good pension .
my questions is what are the chances of getting a small mortgage for the property , the mortgage would be for about 20%of the value at most . her pension wold cover the repayments easily ,depending on how many years the mortgage would cover , ideally an interest only would be ideal and pay off the mortgage if/when she passes. it would be the first time for her ever buying a property as she as always lived in a family trust property left to me and my siblings by my gran when we were kids.

pauline123456

no one any views at all

MovingForwards

I've done some googling to try and get some information for you. Whilst the brokers are finishing their day.

The options are not as vast as they are for someone of working age due to most lenders only lending up to 75-85 years old, this would mean quite high monthly payments.

Interest only mortgages now have very tight criteria eg £75k + income per year.

Some things to clarify would be what's the amount of lump-sum? What do you class as a good pension? Does that include state pension? Does she have credit card balance or other debts she services monthly?

How much is the 20% she is looking to borrow? Often smaller amounts are harder to get with limited lenders even at working age.

Perhaps she should consider 50% loan to value and keep the surplus of her payout for repairs, decoration, moving costs, legal fees etc.

Another thing to consider is one or more of the children club together with savings, lend your mom the 20% and have a private mortgage with the details added to the title deeds, easy for a solicitor to deal with.

[Deleted User]

There are plenty lenders for your mum based on age. Not an issue for that. High street lenders will go to 85 fine and ive taken someone to 97 before with a small regional building society

The thing will be wanting to do interest only with death as the repayment vehicle. Mortgages are set up for a term so whats going to happen if she lives 'too long'.

Has she considered equity release? Lots of options for keeping certain amount of equity in the property to pass as inheritance. She can also make payments to it to pay the interest like a normal mortgage if she chooses to

pauline123456

she will have a £200k lump and approx. £62k yearly pension going up with cpi, that's including her state pension . she is in no debt and will have best credit history.

you mention about children giving parents a private mortgage in a separate matter ,my mum inlaw wants to move as well but doesn't have the funds ,she owns her house but wants a more expensive bungalow , didn't know it was possible to give a private mortgage yourself and put it on the deeds, anymore info on this please also.

thanks for your reply.

pauline123456

its a teachers pension so paid for life

pauline123456

both grandparents wanting to move to bungalows from houses and because no one is building bungalows the prices have shot up , any builders out there take note!!!

pauline123456

the one wanting a mortgage 62k pen 200k lump , what ever amount poss and the options ie interest only .

kingstreet

Research "retirement interest-only" and seek independent advice from someone who has the extended lifetime mortgage permissions, such as an IFA.

https://www.moneyadviceservice.org.uk/en/articles/retirement-interest-only-mortgages

MovingForwards

The private mortgage is a loan from someone eg the kids, to someone else eg the parent, a deed is drawn up by the solicitor to say how it will be paid eg monthly payment for X years or on death, a restriction is added to the title deed to say there is a payment of X due to Y and the property cannot be sold or transferred without it being paid off*

*When the property is being sold the solicitors acting on behalf of the seller (or executor or attorney if acting under a power of attorney), makes a promise that the money from the sale is allocated to the debt first. Anything left over is then given to the seller, used towards purchase a different property, used in the estate to distribute as per will or intestacy rules, or paid towards care home fees etc. -- a rather simple explanation so you get the idea.

Bungalows have shot up in price because they normally come with a decent garden, get extended out into the garden and upwards into the roof.

pauline123456

even small semi bungalows with limited gardens are selling like hot cakes and for above price. No on builds them anymore