Mortgage ending retirement age on benefits

mazworld15

Looking for some help with this please, my friend has a terrible mortgage (used to be Northern Rock not sure who took it over) She's never tried to change it as she is disabled and her only income is PIP and UC.

It has been interest only and the term ends when she's 60 (coming up)

Would any lender take it over? She can afford the payments from her benefits, At the moment she pays £130 pm and DWP pay 70ish

The rate must be high as she owes 38k in total and the house is worth 85K

Are there lenders who will look at this sympathetically, knowing the capital will be repaid "after her day" ?

Or would she be better looking at some sort of Equity Release? Or any other suggestions very welcpme. tia

amibovvered

You already have an open thread with exactly the same question?

mazworld15

https://forums.moneysavingexpert.com/discussion/comment/82066107#Comment_82066107

I have but I thought I'd put it in the wrong section?

ACG

I am not qualified on equity release, but my understanding is that they generally lend up to 25% LTV at age 55 and it goes up by around 1% each year thereafter - so 30%(ish). It looks like she needs closer to 50%.

There might be RIO mortgages, I think it might be worth speaking to a broker as its probably going to take a lot to get this through. Hopefully the fact her repayments are coming down will help get it over the line.

mazworld15

https://forums.moneysavingexpert.com/discussion/comment/82066109#Comment_82066109

Thank you so much, appreciate it

MWT

She should talk to a broker who specialises in retirement products and equity release.

ACG is right about the amount she needs being above what would normally be offered on an equity release product, but if the nature of her disabilities could be considered life-limiting there can be exceptions to the normal lending percentage limits.

If she looks at equity release products another issue is the suitability of her property as the lenders are very picky about what they will consider. Main concerns would be current state of repair (including internal clutter) and location of the property (no commercial adjacencies) together with the construction method, and anything else that might be considered as reducing the saleability.

One key benefit of equity release is that her income is not a factor and no interest payments are required.

If she looks at RIO (Retirement Interest Only) then the nature of her income and the degree to which it can be considered guaranteed through retirement is very important.

One small additional detail, 60 is not 'retirement age' these days, but fortunately these products are available to her from 55.

mazworld15

https://forums.moneysavingexpert.com/discussion/comment/82066553#Comment_82066553

Thank you for taking the time to reply, yes thats important to know as its not in good repair at all