advice re release equity or remortgage

jacobc2007

I'm a retired person over pensionable age but still work part-time. My wife works full time. Our income all around £60/70k we have a reducing mortgage with 7 yrs to run around £80K outstanding. Currently trying to sell for around £500k 

We have been trying to move to get rid of the mortgage, but have a son who is still in education and needs security for his final 2 years and we need to make a college application by February. Secondly, the current climate has resulted in little interest in the property. So feel we now need to stay for the next few years to give him security.

Staying means that we really need to get some remedial work done. While not immediate will need financing and our dilemma is how do we finance that the cheapest way possible?

We are currently halfway through a 2-year fixed mortgage. We would like advice on the options we have to fund this work while keeping our costs as low as possible. 

We have been looking at interest-only/RIO-type mortgages but is it possible to release some of our equity for the work as a separate mortgage on a separate interest-only basis while continuing to pay down our outstanding loan, as we are shedding quite a bit of the principle at the back end of the current mortgage? even despite the interest rise. 

Are there any other options that can looked at to keep the cost down to a minimum or even in reduce payments. We are sort of resigned that an extension to our mortgage is the likely option but just seeking advice to what other options could be considered  

MWT

jacobc2007 said:

We have been looking at interest-only/RIO-type mortgages but is it possible to release some of our equity for the work as a separate mortgage on a separate interest-only basis while continuing to pay down our outstanding loan, as we are shedding quite a bit of the principle at the back end of the current mortgage? even despite the interest rise.

Retirement products like a RIO or other lifetime mortgage products generally need to be the only mortgage secured on the property, and your ability to get one of those products is predicated on the age of the youngest life, so presumably your wife in this case?

Also for a RIO, income is assessed individually as there is a requirement to ensure that either surviving partner on their own can meet the interest payments. Other variations on equity release do not have the same income requirement but are only available if the youngest life is 55+.

These should not be your first option though,at your ages and with your income you should still have options from the normal mortgage market, have you talked to a good broker to see what they can suggest?

gwynlas

If you need to stay put for the next two years then current fix will be exceeded, Surely the work you are considering hasn't arisen overnight so you can wait a bit longer to have it carried out. If you wait you can save towards having this done and it will give you a chance to see what happens regarding general election. Unless your area is particularly blighted house prices are more likely to increase rather than decrease and in a few years you could go to the market as recently renovated.