retirement mortgages

Brocade

When we bought the property there was just a miserable little bungalow , timber frame, draughty, uninsulated, poorly constructed. But it had the magic brick cladding (totally un-structural of course) so we got a mortgage easily. We have built a replacement house that is well built, well insulated, very attractive and comfortable . We managed to pay off our mortgage when it was due to expire, not realising we would run into problems when we needed to raise capital. We could manage to pay an interest only mortgage, but not sure that our income would be sufficient for a repayment type, even if someone would lend to us! As you say, their money, their choice, but no logic to it!

MWT

Brocade said:

We could manage to pay an interest only mortgage, but not sure that our income would be sufficient for a repayment type, even if someone would lend to us! As you say, their money, their choice, but no logic to it!

Interest only with the house as the repayment vehicle would suggest a RIO product which can be a little harder to get than equity release due to the need to pass the affordability test which doesn't apply to equity release but still has similar construction type issues to equity release.

I know you may not accept it, and certainly don't like it, but there is logic to the lending policies as they are not passing judgement on the insulation, the comfort or the sustainable credentials, only on the valuation, ease of resale and the general desire of the market for your selected construction type. Even though it has been around for a while it is still a very niche choice and hence a limited market.

Don't give up though without at least talking to a good mortgage broker to see if a repayment mortgage is a possibility.

Brocade

Aside from our personal circumstances, the issue still remains that this blinkered view of valuation by mortgage companies is standing in the way of improvements in house construction. "Changing how we build houses really does offer us a huge opportunity to meet our ambitious climate change target of going net zero by 2050." This is a quote from the government website. But it is not going to happen while mortgage companies are entrenched in their views. Am I the only one who sees a problem here?

MWT

Brocade said:

Am I the only one who sees a problem here?

I agree it is a problem right now for those like yourself that are ahead of the curve, I suspect it is not going to be a problem by the time the majority of new houses are build to a net-zero carbon standard, but that is still 10 years away at the earliest.

I also suspect we are going to see a lot more standardisation of materials and construction methods over that time as well, so there will be better acceptance of what really constitutes an effective and long lasting construction method that also meets the net zero carbon objectives and less of the wide variations in design and materials used which require individual assessment both of the type of construction materials used and the quality of the execution.

There are initiatives aimed at bringing the financial institutions along with the plan to change our construction methods, but it is still early as we also need to bring the people who want to buy houses along with the same change in mindset.

I do admire your courage in opting for a blend of old and new construction methods, I just don't know if time will show your choice was a good one or just one of many that didn't prove a 'winner' in the long run.

Either way I do wish you luck in achieving your objectives either by way or a mortgage or a successful sale if that is what you decide to do.