Buying a house at 70?

elsien

ClaireLR said:

Rich2808 said:

I think the key question is how much would the property cost to buy - after any discount he gets.

I also assume it would be a freehold house and not a flat in a council block he is buying - the bank will be happier lending on the former.

There are also potential benefits - for now - in him having his money in his property than in cash savings if he ever needs social care at home as the house is ignored for this purpose but savings above £23,000 must be used first. How the new arrangements agree this week will work in practice are unclear. Might also affect his entitlement to benefits - as well as council tax support if his money is in his home not a bank or savings account.

So as has been said yes he could get a mortgage - but unless we know how much the property costs and what any mortgage monthly payment would be relative to his income we can't be definitive.

Have you tried using some mortgage calculators with a major bank or BS to test things out in theory?

https://www.moneysavingexpert.com/mortgages/mortgage-rate-calculator/

Thanks Rich. If I'm honest I don't know how the new social care arrangements would work, I'm hoping if he does need social care that him owning his house (and being able to sell it) would give him the option of a better standard of care, even though he'd have to pay for it himself (by selling the house). 

We've just got off the phone to the bank. The house is worth £135000, Dad can purchase for £50400. Bank have suggested a deposit of around £17500, and lend around £32800, on a five year fix at £337.37 per month (rent is currently £417 per month). He has contents insurance but will also need to take out buildings insurance. 

Any thoughts on the best way to proceed would be appreciated - I dont know much about mortgages, Dad even less and I don't want him to end up making an expensive mistake.

I'd suggest checking other options with a good independent broker if he does want to go ahead. His bank may not be offering the best deals out there. What term are they suggesting for the length of the mortgage? What interest rate are they offering? 
What about mortgage fees and the cost if he needs to get out before the end of the 5 year fix, for example?
He needs to think about all the what if's and elements that may change of the lifetime of the mortgage. 
And avoid the hard sell if the bank is trying to sell him the building or any other sort of insurance. It's not obligatory to take it out with the mortgage provider.
He'd be getting a survey done before committing himself? 

Rich2808

Another factor of course is that the OP's dad is getting a house for a knockdown price of £50k - when its worth £135k. While you cannot sell immediately with right to buy - that is instant profit for him and his family one day,.

I presume he has £17,500 in savings for the deposit (as above) - which means at present he is unable to claim pension credit or council tax benefit as his savings exceed £16,000. So is Dad getting his full entitlements - or are the savings just sitting there earning zero interest and costing him monthly state benefits? My dad was prudent and saved - and wouldn't spend the cash and just ended up wasting money on home helps in his last year (for only a few months sadly but had his health deteriorated he might have been paying those for years) when he would have got them for free if he hadn't left money in savings. 

The mortgage is also £70 less a month than his rent at present - and maybe could be even less with a more suitable deal.  Yes there are costs to running a home - but eventually he will stop paying the mortgage but he will be paying rent to the council until he dies. And once he passes the home will be returned to the council to let to someone else.

And more importantly OP - could you or other family members not help out with the monthly costs (or repairs and maintenance costs if needed). As one day he might need the house to fund his care or you will inherit it.

I am not a fan of right to buy generally - apparently 42% of RTB properties are now essentially being rented back to the same councils who sold them by buy to let landlords (shocking) to house poor people (directly or via housing benefit). But that's not the OP's dad's fault!

csgohan4

interest rates are low at the moment but they will eventually rise. Can you dad afford mortgage payments as well as maintenance. A new boiler or roof isn't cheap. Getting a plumber to fix things aren't pocket change either. 

It has alot of negatives for him and who gets the positives i.e profit from RTB, Won't be him realistically but family. Depleting his savings and not being able to enjoy retirement is a bad deal really, it's not like he is moving somewhere nicer .

OP in your posts, you never mentioned what your dad wants? Only about how much profit the house could make and about the RTB discount your dad got.

Please seriously consider your father's position in this and not just the £££.

If the house is repoed he would be considered intentionally homeless and would not be priority, although pragmatically the council may help, but it likely be of poor quality and in a bed sit. 

I'll leave you with an example of when it has gone wrong

https://forums.moneysavingexpert.com/discussion/5789909/new-roof/p1