Mortgage Options?

A

AndyHobbs

Guest
Can anyone suggest options for the following scenario:
Retired couple 60's living in own house -no mortgage with some surrounding land. Assets worth approx 1million. Cant get a mortgage because only a few years to go before the 70 age cut off by which mortgages have to be cleared. On current income could afford repayments on about 80-100,000 at interest rates of 4/5%, but banks etc. only interested in offering term loans and such like. Surely there must be some financial product out there which would offer something with mortgage like interest rates ????? Or maybe not.....
 
I heard of a situation where a couple sold their home in Dublin at retirement age to a bank (dont know which one, sorry, but cant be that hard to find out). They have the money to spend now as they wish, plus continue to live in their home and when they die, the bank gets the house. It may be an option?
 
If you mean equity release/reversion products from the likes of SHIP, BoI LifeLoans or Residential Reversions Limited (use the search to find more on these when it's enabled again) then bear in mind that there has been some criticism of such products in particular in relation to the charges that apply.

Do the couple have any adult children that might buy them out (in part or full) and allow them to remain there in the meantime? Could they trade down and pocket any gain arising free of CGT?
 
They dont want to move. Nor would they sell to a bank. I don't think buy out by the children would be an option. There is one Son who will likely inherit the house. Could it be gifted/transferred to him without incurring any great tax liability and a mortgage be obtained in his name? They might go for that.
 
Where did you get the 70 yr of age cut off? It is infact illegal for a financial institution to decline a mortgage based on age. If the person can demonstrate repayment capicity post normal retirement age of 65, they CAN NOT be discriminated against. This fact is covered off under the equal status act. Any bank found to be in breech of this act could find themselves in very big trouble.
 
AndyHobbs said:
There is one Son who will likely inherit the house. Could it be gifted/transferred to him without incurring any great tax liability and a mortgage be obtained in his name? They might go for that.
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They should get professional advice on this sort of strategy.
 
As per Clubmans comment in relation to SHIP...

You can release capital on the property.. pay approx 6% interest only... until death and then the capital is paid back. But you can repay the loan at any stage before death.
 
AndyHobbs said:
They dont want to move. Nor would they sell to a bank. I don't think buy out by the children would be an option. There is one Son who will likely inherit the house. Could it be gifted/transferred to him without incurring any great tax liability and a mortgage be obtained in his name? They might go for that.
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They can gift up to approx 470k either in assets or cash without tax implication. Son could perhaps take out mortgage for rest depending on status. Think there will be stamp duty issues tho! And capital gains tax liability for parents.

Best to seek professional advice.
 
bambino said:
Where did you get the 70 yr of age cut off? It is infact illegal for a financial institution to decline a mortgage based on age. If the person can demonstrate repayment capicity post normal retirement age of 65, they CAN NOT be discriminated against. This fact is covered off under the equal status act. Any bank found to be in breech of this act could find themselves in very big trouble.
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The son checked with two Banks and was told the same thing that their policy is that the mortgage must be paid off by age 70. They have rental income from land and could easily afford a mortgage of 30-50K. Family have agreed to sign as guarantors but banks werent interested.

Can a mortgage not be got on the basis of agricultural land? The son asked if part of the land was signed over to him could he get a mortgage on that and he was told it had to be property by both banks? I thought it didnt matter what the asset was?
 
Makes no difference what the banks say their policy is, they are in breech of the equal status act (you can ring the equality people if you don't believe me) You would absolutly have a case against the banks in question especially if affordability can be demonstrated. Policy or no policy they are breaking the law.
 
bambino said:
Makes no difference what the banks say their policy is, they are in breech of the equal status act (you can ring the equality people if you don't believe me) You would absolutly have a case against the banks in question especially if affordability can be demonstrated. Policy or no policy they are breaking the law.
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Thanks, I'll look into that. I'm sure that if they are forced to offer something they'll find a way to make it outrageously expensive through life insurance charges or something, but its worth a try. Thanks again.
 
The normal mandatory requirement for owner occupier mortgage protection life assurance can be waived for certain borrowers including those over 50. See [broken link removed]. Not all lenders will actually necessarily waive the requirement though.
 
ClubMan said:
The normal mandatory requirement for owner occupier mortgage protection life assurance can be waived for certain borrowers including those over 50. See [broken link removed]. Not all lenders will actually necessarily waive the requirement though.
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As far as I know Bank of Scotland will waive the requirement.
 
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