Life Loans

F

frances hanley

Guest
My dad who is now 71 is living alone in his home (my single sister sometimes come to stay) now wishes to obtain a life loan in order refurbish the home so that it does not lose its value.

The house is valued at 600-700k and he wishes to borrow about 40k.

When asked if he was the sole occupier he said yes but that his children come to stay in turns.

The bank have gone away to think about this and I wonder if any of you can give me an idea where he can apply other than BOI.


Many thanks
 
I think that the Bank of Ireland is the best commercial option for your dad. It's an expensive loan at around 6.25%, but I don't like the other options.

The other two schemes available involve your dad selling part of his home now, while retaining the right to live in it. Not a great idea.

One of the children should consider remortgaging their own home for the funds. This way it will cost 3% instead of 6% and it is a lot more flexible.

Brendan
 
Has Bank of Ireland illustrated how the €40k loan could mushroom over time?

No payments will be made until your dad passes on. Meanwhile interest will keep clocking up at a very high rate. If you dad lives for another 15/20 years, it's entirely possible that the loan could be worth most of the value of the house. Be very careful.
 
In ten years, he will owe 73k. In twenty years, he will owe 134k.

If house prices rise by more than 6.25% annually, he will owe a lower proportion of the house in 20 years than he does now.

Brendan
 
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