Parents in 70's want to borrow £25k

termhero

Both my parents are in their 70's with standard state pensions.  They own a property which they live in mortgage free worth around £300k.
My Dad needs a medical procedure and cannot wait for the NHS and is going private.
He has asked me what his options are to raise around £25k to do this, the only stipulation was NOT an equity release.

So I'm guessing either a loan or mortgage secured against their property is my guess, but I'm after advice from people more knowledgeable than myself.

foxy-stoat

Does the private clinic have any finance options?
Or you take out a loan and give them the £25K, they can make payments to you in the mean time, you will get it back eventually.

eddddy

termhero said:

So I'm guessing either a loan or mortgage secured against their property is my guess, but I'm after advice from people more knowledgeable than myself.

Do they have sufficient income to make loan repayments?

They could look at 'equity release' - which is essentially like a mortgage where you don't make any repayments - so the interest piles up, and is paid off when the house is eventually sold. (But it tends to work out expensive.)

Another option is for you to lend them the money. If they can afford to make repayments, that's great - if not you get the money back when their house is sold.

kazwookie

Can your dad get a 2nd or 3rd opinion as to the cost of this operation? How long have the NHS actually told him the wait is?

Personally I wouldn't be encouraging my parents (if they were still alive) to get getting a loan or similar in their 70's, how are they going to repay it back?

Does you dad have any stocks or shares / ISA's he can cash in? and valuable silver / jewellery / car to get the money?

termhero

foxy-stoat said:

Does the private clinic have any finance options?
Or you take out a loan and give them the £25K, they can make payments to you in the mean time, you will get it back eventually.

I don't know about the clinic, will have to look into that.

I've already looked into the option of borrowing the money myself, but my parents want to handle that.

eddddy said:

termhero said:

So I'm guessing either a loan or mortgage secured against their property is my guess, but I'm after advice from people more knowledgeable than myself.

Do they have sufficient income to make loan repayments?

They could look at 'equity release' - which is essentially like a mortgage where you don't make any repayments - so the interest piles up, and is paid off when the house is eventually sold. (But it tends to work out expensive.)

Another option is for you to lend them the money. If they can afford to make repayments, that's great - if not you get the money back when their house is sold.

They have basic state pensions, as I stated.  Outgoing would be costs of living, which isn't extravagant by any shape or means.  Simple answer is though I don't know if they could afford the repayments.

The only stipulation was no equity release for the above reason.

kazwookie said:

Can your dad get a 2nd or 3rd opinion as to the cost of this operation? How long have the NHS actually told him the wait is?

Personally I wouldn't be encouraging my parents (if they were still alive) to get getting a loan or similar in their 70's, how are they going to repay it back?

Does you dad have any stocks or shares / ISA's he can cash in? and valuable silver / jewellery / car to get the money?

I don't know, he's not in a position to shop around in his situation unfortunately, he needs the procedure asap

Personally I wouldn't be encouraging my parents to get a loan in their 70's either, I'm merely trying to find out something at the request of my Dad.  I don't know how they're going to pay it back.

He doesn't have anything of value to sell, no.

Does anyone know if they could obtain an interest only mortgage on their home, or a loan secured against their property to decrease the payments?  This is the information I'm really after, thanks.

joshiesaunt

It might be better to post on one of the property boards as there are brokers on there who can advise.

foxy-stoat

termhero said:

Does anyone know if they could obtain an interest only mortgage on their home, or a loan secured against their property to decrease the payments?  This is the information I'm really after, thanks.

Problem they are going to have is just because the loan is secured against a property doesnt mean it will have lower payments.  Say they took out an interest only mortgage, if they could, how are they going to pay £25,000 in a lump when the term ends?

Lowest rate personal loan over 5 years is £455 a month and £333 over 7, assuming they can get the lowest rate - is their income high enough to support such a loan?

So options are limited if, 
They don't want equity release,
They don't want you to borrow the money and gift it to them, or they make payments to you,
You do not know their full financial position,
You don't know if the clinic have a finance plan.

If they have credit cards with money transfer option or if the clinic take credit cards thats an option, they can balance transfer shuffle for a few years - the minimum repayments may be more than a loan though. 

Sell their current property and down value would be the next logical step or see a mortgage broker and see if there are any products available, but they would need to do that themselves.

bonkersbonkers1

Interest only loans are virtually impossible to get at the moment. Perhaps a Mortgage for life similar to equity release might be an option.
I agree the mortgage board might offer good advice.

MinuteNoodles

With their income the only option for £25k is equity release in one of it's many forms. Even if they weren't in their 70s they have the combined income that someone in a full time job on national minimum wage would have and no way would a bank lend someone £25k with that low level of income.

bris

The Equity release is the only option in the given circumstances.
It's expensive and 25k in interest alone would take a huge chunk of the equity out the house in a few years.

Bottom line is if it's a life changing operation then the inheritance is all that will suffer. 

Petriix

It's entirely possible that they might be able to borrow £25k on a regular mortgage. Many lenders are lending into later life based on pension income alone. You should speak to a broker.