Case study Used Spry Finance to enable an 89 year old to trade down

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Tryingtoplan

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I’m wondering if anyone has gone through a similar situation and can provide some guidance, or if anyone has heard of similar.

My father (89) is widowered and is now looking to downsize. Has about €200k savings available and a main residence worth about €600k. He is looking at properties circa €400k and what I’m wondering is the following.

His only current income is state pension and civil service pension so with his age and his income will be unable to get a bridging loan for the circa €200k required to add to his savings to purchase the property.

He doesn’t want to sell his current house until he has secured a new one and certainly does not want to rent during the interim period.

So I see two possible scenarios (but not sure if either are viable options):

Option 1:

What I’m wondering is whether I can apply for a bridging loan (to help him with the purchase) but based on my income and his equity in his existing house?

Option 2:

Apply for the bridging loan based on my own ppr house (value €500k, no mortgage) and purchase the trading down property for him (leveraging loan and his savings) and repay the bridging loan when he sells his existing home?

Any and all advice/ guidance/ pitfalls would be really appreciated from this group of experts
 
His best option will be a Lifetime Loan from Spry Finance

Key Post - Spry Finance Lifetime Loans

I find the Spry Finance website complicated so this is my summary of it. If you are at least 60, you can take out a Lifetime Loan from Spry Finance. There are no other providers in the Irish market which is a pity. You do not have to make any repayments, they will roll up the interest. The...
www.askaboutmoney.com

Normally*, they would lend 40% of the value of the property to someone aged over 85, so €240k.

He then buys his new house and sells the old house.

He will have to pay an early repayment penalty of up to 2%, but that would seem worth it under the circumstances.

* I say normally, because they might not want to lend if the loan is going to be repaid very soon.
 
Option 2

Your father gifts you €80k.
You take out a mortgage and buy the house in your name. This would be a buy to let mortgage.
Better still, if you have €80k, you can simply buy the new house without a gift from him.

Your father sells his own home.
He buys the house from you.
You repay the mortgage.

You will have one extra set of legal fees and 1% stamp duty.

Brendan
 
Spry Finance would be an option. Based on his age he could borrow 40% of the value of his house =€240K and with his savings of €200k, that would get him to the level he needs.

Their website states that if he sells the house, there is no early repayment charge or also after his 88th Birthday there is no charge.
 
Thanks all, I’ll reach out to Spry and see if we can figure something out as that seems like a good option.

For those saying that bridging loans are no more, ICS mortgages re-introduced them at the end of 2024 as far as I am aware

Thanks again for all the replies
 
Why does he want to downsize? From what size to what size? Seems a very stressful idea given his age.

Despite what he wants he should sell his own house first. When that goes thru he buys what he needs. And goes to live on a cruise ship for a couple of months in the meantime.
 
Is staying with you for the interim between selling his home and rebuying an option? Maybe use a storage unit for furniture etc.

I think as posted above you will find it hard to get this loan at his age and for this purpose. It's a lot of risk for the lender.
 
Hi all,

Thanks for your replies and advice.

Des Pondent said:
Moving home is very stressful.
Your father has a home, a comfortable income and savings.
Unless there is a very good reason for moving, I would be encouraging him to stay where he is, it doesn't matter if the current house is too big for his needs.
Click to expand...

It’s not just the size of the house that’s the issue. His current home is about 5km outside of town and he can’t drive and it’s too long to walk (although believe it or not he currently cycles his bike to town) so he is dependent on lifts from neighbours and calling taxis going forward. Yes this is something he could maintain but as he puts it “I want to be able to pop out to the shop for a loaf of bread if I want it and not rely on someone else to bring it to me”. It was my mum who loved the country life until she passed away earlier this year and she was the only one who drove. He wants to retain his independence as long as he can so this is really the primary driver, the big house is actually secondary.

sonandheir said:
Is staying with you for the interim between selling his home and rebuying an option? Maybe use a storage unit for furniture etc.

I think as posted above you will find it hard to get this loan at his age and for this purpose. It's a lot of risk for the lender.
Click to expand...

Yes, this is an option and one I have proposed but as I live 2 hours drive away, he is reluctant to lose his social circle while remotely house hunting from another town. He is happy to pay the cost of the interest / opening / closing costs of the finance to smooth the transition from his current home to a new one and owning both for a period of time just makes this totally stressful time a lot easier!

Personally I think he’s being very brave to be suggesting making this move at his stage of life and I want to respect his wishes and make it as stress free as possible.

I’m going to explore the options suggested with Spry and I’ll let you all know how it pans out
 
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He sounds like he is in great health and also has a good social life which is brilliant.

However, is he aware of the difference cash is treated v a home if fair deal might be a consideration down the line? Not something that should change or dictate what he wants to do but might inform what he does with the cash that is released as a result of the move.

Fair Deal Scheme

People who move into registered nursing homes may receive financial support from the HSE under the Nursing Homes Support Scheme, also known as the Fair Deal scheme.
www.citizensinformation.ie www.citizensinformation.ie
 
Tryingtoplan said:
It’s not just the size of the house that’s the issue. His current home is about 5km outside of town and he can’t drive and it’s too long to walk (although believe it or not he currently cycles his bike to town) so he is dependent on lifts from neighbours and calling taxis going forward. Yes this is something he could maintain but as he puts it “I want to be able to pop out to the shop for a loaf of bread if I want it and not rely on someone else to bring it to me”. It was my mum who loved the country life until she passed away earlier this year and she was the only one who drove. He wants to retain his independence as long as he can so this is really the primary driver, the big house is actually secondary.


Yes, this is an option and one I have proposed but as I live 2 hours drive away, he is reluctant to lose his social circle while remotely house hunting from another town. He is happy to pay the cost of the interest / opening / closing costs of the finance to smooth the transition from his current home to a new one and owning both for a period of time just makes this totally stressful time a lot easier!

Personally I think he’s being very brave to be suggesting making this move at his stage of life and I want to respect his wishes and make it as stress free as possible.

I’m going to explore the options suggested with Spry and I’ll let you all know how it pans out
Click to expand...
Well that's a very very good reason for him to move and puts a lot of context to the original question. I've a parent who did that, moved right into a town as they were getting older and wanted to be around family and friends, plus wanting to be able to pop out for a loaf of bread without it being a big inconvenience. It worked out really well especially as the fear of driving began to creep in.

He absolutely should not move away from his social circle. And yes he is very brave to make this move. Are you certain he needs to spend 400K. Surely he needs a downstairs place (living/kitchen/bathroom/bedroom) rather than a house.

When he moves you should probably employ professionals to pack up/declutter. But he may not like that. So maybe everything just has to come with him. It can disturb older people if you try to clean out their stuff. Leaving the dumping to later (I had a sibling want me to take out an item from the bottom of a skip once ! sense prevailed thankfully)

(sorry for your loss)
 
All, just wanted to add a final post to let people know how we got on with things as it has all worked out extremely well.

So we spoke to Spry finance and managed to secure a lifetime loan of €200K having confirmed with them that there would be no early redemption fees due to my dad's age when taking out the loan. Roughly speaking the interest is a little over €1,000 per month

He used this plus his savings to purchase a smaller property in town and is significantly happier there as it gives him access to shops, church, restaurants etc. all within walking distance from his new house.

His original house has now sold and I simply contacted Spry prior to listing it, to let them know that we were planning on selling it and they were completely fine about the listing, simply saying that our solicitor would contact them for the deeds, and arrange settlement once the house had sold.

This is now concluding and the repayment to Spry happening this week with about 9 months interest charged but for the reduction in stress this has allowed, its been so worth it. Yes there were some additional setup fees from Spry and their legal fees but all in I would highly recommend this process for somebody in a similar situation who is thinking of downsizing and wants the option to move into their new house and then worry about selling their existing one. Even if the product isn't necessarily intended for such a scenario!
 
Excellent feed-back. Your dad is a very practical men. 10k extra costs +/- . But with great peace of mind and a very successful outcome. We don’t often hear of how Spry can be very beneficial, as long as you know what you are doing. Also important for us to know how easy it was with Spry.

Your father has made a will? And might consider some tax free gifts etc.

Thank you for coming back with the update.
 
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@Tryingtoplan

It's great to get the update.

I have been recommending Spry for some years and the outcomes have nearly always been positive. It's good to get a real life case study.

I had some doubts that they would facilitate this given the very short-term nature of it. But I suppose if you paid their costs up-front, then it has been profitable for them as well.

Brendan
 
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