Can 69yr old qualify for morgtage?

[Fiona]

Hi,

I don't hold out much hope here but my sister and I would like to buy a house together. She is a FTB earning 21k and I am not working at the moment.

I am recently separated and waiting for solicitors to hammer out a deal or else wait until 2008 for settlement to be decided by courts. The mininum I expect to get from settlement is 250k, that's the very bottom line.

So, my father who has assets worth apprx. 700k and no debts/mortgage, never had a mortgage is willing to back the house purchase by either going guarentor or buying the house himself.

The house value would be around 350k!

What kind of mortgage would he qualify for if any?

 

[Lorz]

If he has a good relationship with his local branch, they would probably give him a branch loan as opposed to a mortgage through HQ. Otherwise, I couldn't see a problem with him going guarantor. Especially important is the low % borrowing v value of his assets.

 

[Fiona]

Perhaps we are not completly mad then.

Yes, he has a good relationship with the Bank Manager. He's never had a loan and always in the black. Is a branch loan the same as a bridging loan and if so what are the interest rates like? A branch loan for this amount has to be approved outside the branch though, I was told.

In an ideal situation, which is far from realistic - a loan for 100% interest only for 2 years would be perfect. We have no cash so to speak for deposit etc but I would be putting all the cash from my settlement into the house so that we would have very little or no mortgage eventually. In the meantime, my sister would live there and we would rent it out. Its 5 bed and close to where she shares at the moment so they would all just move over the road.

I have not contacted the Bank Manager as yet, as I want to be sure that he will not be in hysterics at us!!!

 

[Marie]

I have not contacted the Bank Manager as yet, as I want to be sure that he will not be in hysterics at us!!!

You don't need the bank's (or anybody else's, for that matter!) approval or agreement for how you spend your money whether its on purchasing a house or going straight down to the nearest casino with a suitcase full of the stuff!

Your age - and your sister's age - would only be relevant if you were taking out a mortgage to purchase and it is only relevant then in terms of likelihood of the debt plus interest being repaid before you retire/die.

 

[Fiona]

How does the bank loan work ? Will he have to give the deeds of his farm/house to the bank to secure the loan? If the deeds of the new house are in his name, how do I get them removed from his name into mine when my money comes through?

I am sure this is a really complicated process. Any idea of the interest rates involved for a bank loan of this size?

 

[Sarah W]

Lenders do look at assets when assessing a mortgage application but the main emphasis is on ability to repay. From the original post the only income is your sister's €21,000 which will only qualify her for a mortgage of €140,000. Unless your father has a substantial income I can't see you getting much more than that. No lender would want the publicity of evicting a 69 year old man from his home because he/his children could not repay a mortgage.

Sarah

www.rea.ie

 

[Fiona]

I agree Sarah and I don't think he'd care much himself for being evicted either.

It was a long shot and I don't think its realistically possible to get approval even though it is possible to repay, if you see what I mean. It would generate rental income of 1500 for a start from day one. If the loan was interest only there would be no problem. If the loan was at 2.8% or thereabouts, then we each have a site worth 80k each and one of these could be sold to make up the shortfall in the repayments. In 2 years time max, if not before I will have 250k cash that I would use to pay back the loan. So provided the sky didn't fall down in between, all would be ok.

Alas, we'll have to wait for the readies in our hand before persueing a property.

 

[Marie]

I don't really understand why you and your sibling cannot buy a house to live in jointly if you are about to receive a minimum 250K and your father has 700K savings which he is willing to sink into your purchase as a gift or loan. One of you has an assured income of 21K p.a. and you are "at the moment" not in employment (but could be at any stage).

? I'm lost. What are the difficulties again?

 

[Fiona]

Maire, because the 700k that my father has is in assets; his home and two farms of land. He has a small retirement income, pension and rent from some land. He wouldn't want to sell any land (unless in the unlikely case we got into difficulty) he would prefer be guarentor or do whatever he has to do to secure a loan for us without having to sell.

So we all cash poor, you see.

My settlement has not been settled and is with solicitors but my ex and I have equity in our property of over 500k which is in both our names. I don't see a bank being able to look at a settlement situation before it has been settled.

Shame as this house would suit sis and I's situation. She would live in it and rent out the rooms and when my money comes through I would move in.

When I get my settlement money, this house will be sold and I will have to buy somewhere else immediately, so I was trying to forward plan.

 

[extopia]

Have you considered renting for a couple of years? What's the rush? If you want rental income just rent a large house and get some roommates.

I think it would be a shame to put this kind of pressure on your aging father to be honest, no matter how willing he is to help. A "branch loan" even if he could get it, would be expensive. If he really wants to help maybe he could sell one or both of the farms.