Any mortgage brokers or equity release bods in the Club?

[Herbie]

Married couple, both 64 years old and retired, house worth about £215k, fully paid up and no mortgage or other debt.

No kids or other relatives to leave a legacy to, so original plan was to release as much equity from the bricks and mortar as possible and spend it in whichever way we choose, whilst we can still enjoy it.

Unfortunately the wife's mobility is getting worse and climbing stairs will become a problem in the not too distant future, so now considering moving to a bungalow (stairlifts and 'through-floor' lifts ruled out because of space reasons).

Ideally - we sell for £215k and we buy for £215k
Most likely reality - we sell for £215k but need to add £40k-£50k for refurbishment or to buy a better place initially.

Question:

What is the best way of funding that extra £40-£50k?

Mortgage? Would we even be eligible given that we are both 64 and retired?
Equity release?
Could we even, for example, buy a £265k property with £215k and then release £50k equity from it on the day it becomes ours, to pay the balance off?

Stuff like this makes my head hurt - give me a few wires to play with and I'm a happy camper, but things like this just bring me out in a cold sweat.

[doog442]

Retirement interest only mortgage for funding the new property and extra £50k ? You simply pay the interest.

As a quick example Nationwide are doing a 10 year fixed at 2.99% . This would equate to £125 a month for 25 years at that rate for an extra £50k. 

They also do a capital & Interest mortgage if you wanted to pay the £50k off, obviously that would be larger monthly payments but with no kids / legacy perhaps equity release as you say ?  

https://www.nationwide.co.uk/mortgages/over-55s-mortgages/rates/

[PRT68]

If selling at £215k and buying for similar, have you budgeted for selling, legal and stamp duty fees?

Presume you've looked at bungalow prices? The lack of new bungalow builds is creating a premium on prices now, especially in my area.

Whatever you do, don't go leasehold!!!

[ALAW]

Im no expert Herbie but equity release as pointed out looks best bet for you and the wife. Bungalow might be a problem finding one they are as rare as hens teeth where i live.

[LenT]

On the face of it, you do seem to be a candidate for equity release, mainly because you have no beneficiaries. However, you want to fund a purchase with an additional mortgage and then cover the additional mortgage with an equity release.

One problem may be that many mortgage providers may have an age limit of 65.  I presume that you don’t have trusted Financial Advisers or Solicitors to approach or you would be doing that.

I see that Nationwide has been mentioned, but might I suggest the Equity Release Council?  This is a kind of trade association to which all the major providers have subscribed.

They list them here:

https://www.equityreleasecouncil.com/find-a-member/providers/

it might help to approach a few and see how they react.  But bear in mind that 64 will still, hopefully, mean you need to release sufficient to last you a few good years yet!

All the best with it.

[Malc]

19 hours ago, Herbie said:

What is the best way of funding that extra £40-£50k?

rob a bank methinks .......... get caught and spend some time at HM Pleasure with full board and free exercise and no need to worry about the stairs ...... 

SORRY I jest ..........  good luck with whatever you decide upon  .........  it's so important to get out of life whatever it is you wish .... some people just go on a back to back cruise for the rest of their days ....  but then you wouldn't get to use your Lexus and that would be a sad day .............

Rather than equity release you could ask say, Fred Olsen for a cruise deal in exchange for your house and car etc ??

The ultimate in Equity Release 

Good luck with whatever you decide upon

Malc

[Herbie]

Thanks everyone for taking the time to reply.

Malc - it's a good idea but not for me as I get seasick in the bath

To be honest, neither of us have ever fancied a cruise at all. We've always been independent travellers and we'd hate to dock at a place, find that we really love it, but then have to sail off somewhere else before we're ready to leave.

Len - we did look at the Equity Release Council (thanks for that) and found that Nationwide are on there anyway. We had a look at some of the others but from what we could see and given that Nationwide had already been mentioned twice, we decided to start the ball rolling with them.

The first appointment they could give us with a mortgage advisor is on 30th May so I'll update this topic when I can.

Thanks again folks, much appreciated.

[DavidCM]

Herbie..I,m not a broker or financial adviser,but was in property for most of my working life,mostly as a Chartered Surveyor doing mostly mortgage valuations.

As I understand it there are 2 types of loan available.A mortgage from the likes of Nationwide designed for retired folks like you and me,or a loan from an Equity release company. 

You need to get independent advice on this and DO NOT rush into it.Brokers and Financial Advisers  make their living from selling financial products,so try to get recommendations from friends.There are some very good people out there who will give you good advice,but they are probably outnumbered by the sharks.

Get a few opinions and don,t rush into anything.Good Luck with it...I,ll probably be going down the same route too.

David

[LenT]

15 hours ago, Herbie said:

Len - we did look at the Equity Release Council (thanks for that) and found that Nationwide are on there anyway. We had a look at some of the others but from what we could see and given that Nationwide had already been mentioned twice, we decided to start the ball rolling with them.

A very sound choice, Herbs, with whom - as you say - to get the ball rolling.

However, I don’t think it ever harms your cause to let these providers know they are not alone in seeking your hard earned.  I say this because I see that an outfit just called ‘Just ‘ is also a Member.  Many years ago they beat the Pru as one of my Pension providers.

At the time they stood out as being very flexible and - apparently- keen to find ways to improve their offer.  Which they did at the substantial expense of the Man from the P.

I note that they have a specialist Equity operation.  As far as a recommendation goes, I can only say that in the intervening  years I have never had cause to regret choosing this particular pension provider.

[peniole]

Sorry to hear about the mobility issues. @Herbie If you're still looking for bungalows, let me know. I know of a couple of new build in Lancashire. About 15 minutes east of Preston. Good builder, we're waiting on our build to complete. Bungalows at 275k.

[Malc1]

maybe a terrible minefield right now with this stitch-up by the stupid politicians ( that's all of 'em by the way .....  not just the current mob in Govt ) ............... Herbie 

Hope you're getting max use from your Lexus and that your Mrs is " holding her own "

The interest rate charges must be eye-wateringly bad just now and into the short future ............ maybe get some local builder to give you better specific advice on an internal lift and stay put .  there's all sorts of Council and maybe other Grants for these sort of internal alterations too if appropriate 

It's amazing what a clever eye and informed can fit into a tiny space with modern technology lifts etc

Best wishes

Malc

[Phil xxkr]

41 minutes ago, Malc1 said:

maybe a terrible minefield right now with this stitch-up by the stupid politicians ( that's all of 'em by the way .....  not just the current mob in Govt ) ............... Herbie 

Hope you're getting max use from your Lexus and that your Mrs is " holding her own "

The interest rate charges must be eye-wateringly bad just now and into the short future ............ maybe get some local builder to give you better specific advice on an internal lift and stay put .  there's all sorts of Council and maybe other Grants for these sort of internal alterations too if appropriate 

It's amazing what a clever eye and informed can fit into a tiny space with modern technology lifts etc

Best wishes

Malc

Good advice Malc 👍

[royoftherovers]

1. A Prefabricated Bungalow ?

2. https://www.tandie.co.uk/property/listing-55345885-bungalow-sale-chorley-lancashire-gb&summary?utm_source=newsnow.co.uk ?

[Herbie]

Thanks for your interest and your advice folks, it's much appreciated. If we were different people we would take it and our problems would be quickly solved, but unfortunately we are our own worst enemies.

First of all, we (or more correctly, I) need to stay in Preston. I once tried a move up to Carlisle - only an hours journey up the M6 - but within four months I was desperately homesick and came back. It wasn't for Preston the town, but my mates. One particular set of friends mean the world to me and the twelve of us have known each other since the first day of infant school, 59 years ago. We meet up at least once a month for a few beers but we all share a love of the same kinds of music so we all go to gigs together as well and usually have a couple of 'lads weekends away' each year.

Secondly, after having a few beers in the town centre, I know that by the time I get home (just 3.0 miles) I'll have to rocket out of the taxi and break the world land speed record to get upstairs to the loo, so I can't live any further out than a 3 mile radius from the town centre.

Add to that that it absolutely must be a detached bungalow with garage and I can see us being in rented accommodation for quite a long time before something comes up that fits the bill. It's not ideal and it'll be a pain to have to move twice, but we're OK with that.

Malc - good advice mate but our house is more than halfway through the selling process and we'd hate to let the buyer down. Plus, now that we've made up our minds to move, we want to do it, especially as a detached place will allow me to play my music as loud as it's intended to be 

[Malc1]

2 hours ago, Herbie said:

more than halfway through the selling process and we'd hate to let the buyer down.

Your considerations and sentiments are very worthy BUT  BUT  BUT  you must do what's best for you and if needs be let the other people down,,,,,,,,,,  gently

You and yours are far more important at this terrible economic catastrophe time brought upon us by these dickheads in Govt

Malc

[LenT]

2 hours ago, Herbie said:

Malc - good advice mate but our house is more than halfway through the selling process and we'd hate to let the buyer down.

Additionally it puts you in a very good situation when it comes to buying.

Currently my BiL is looking to buy a house and Agents he approaches are still telling him to sell his first - despite the current mortgage difficulties for some.

Park the cash in an easy-access account and get the benefit of the increase in interest rates.  If you decide to take up a short term rent it’ll help to offset that cost.

I expect you’re probably already doing all this!

All the best.  👍

[ALAW]

Good luck Herbie. Be careful though as Malc points out we are in a very unstable time economically. Many people have had mortgage offers declined due to uncertainty in the interest rates. Don't be afraid to take the house off the market seriously as pointed out above do what is best for you and the wife. Regarding bungalows its quite a job to get one. We live in an area where no more will be built. I take an interest looking at various planning decisions and you regularly see that developers don't put enough bungalows in there mix or affordable housing. I repeat don't be afraid to take the house off the market.

[Malc1]

17 hours ago, Herbie said:

especially as a detached place will allow me to play my music as loud as it's intended to be 

hahahahaha I think not

Only if you encase yourself in a sound proofed studio ............ terrace, semi or detached won't make one iota of difference to your sound travelling .............. unless you're Pop Larkin out in the wilds somewhere 

Malc

[Herbie]

12 hours ago, ALAW said:

Good luck Herbie. Be careful though as Malc points out we are in a very unstable time economically. Many people have had mortgage offers declined due to uncertainty in the interest rates. Don't be afraid to take the house off the market seriously as pointed out above do what is best for you and the wife. Regarding bungalows its quite a job to get one. We live in an area where no more will be built. I take an interest looking at various planning decisions and you regularly see that developers don't put enough bungalows in there mix or affordable housing. I repeat don't be afraid to take the house off the market.

Thanks Brent, good advice, but I think we've done our 'due diligence' and have all bases covered unless Civil Service and BT Pensions go bust (but nobody can make contingency plans for that).

The thing about Lifetime Mortgages is that there's hardly any hoops to jump through. They don't need to 'agree in principle'; we can choose to pay interest and capital like an ordinary mortgage (no) or pay nothing at all (no - because interest would compound too quickly), or the third option, the one that we're going with, is pay interest only. The debt is only recovered when the last one of us either dies or ends up in long-term care.

Nationwide will lend up to 36% of the value of the property and even if interest rates go a lot higher yet, we can still afford the monthly payments. Although the interest rate of a lifetime mortgage is fixed for life at the outset, I believe we could also remortgage later on to get a lower interest rate.

Sadly, staying in this house wouldn't solve all medical problems and a bungalow is really the only option we have.

[Herbie]

5 hours ago, Malc1 said:

hahahahaha I think not

Only if you encase yourself in a sound proofed studio ............ terrace, semi or detached won't make one iota of difference to your sound travelling .............. unless you're Pop Larkin out in the wilds somewhere 

Malc

I'm not talking about a bank of Marshall Amps and a 10x10 stack of 100W speaker cabinets here Malc 

This place would have enough separation to allow a decent volume. It recently sold for £285k but we missed out because we hadn't sold our own house at that time

 

[LenT]

6 hours ago, Herbie said:

I'm not talking about a bank of Marshall Amps and a 10x10 stack of 100W speaker cabinets here Malc 

This place would have enough separation to allow a decent volume. It recently sold for £285k but we missed out because we hadn't sold our own house at that time

 

Are you not a fan of headphones?

For a truly immersive audio experience they beat a bank of speakers!  And no-one knows what it is that you’re enjoying.

[Herbie]

38 minutes ago, LenT said:

Are you not a fan of headphones?

For a truly immersive audio experience they beat a bank of speakers!  And no-one knows what it is that you’re enjoying.

True, and I do use cans sometimes but I'm lucky to have a wife who also enjoys the same sort of music and at the same sort of volume that I do 

[steveledzep]

Go for it Herbs.  I'm a bit of a HiFi nut and I like my music through my speakers at "realistic" levels.  I live in a detached bungalow, so you're on the right lines here.  All the best to Mrs Herbs.

[Herbie]

56 minutes ago, steveledzep said:

Go for it Herbs.  I'm a bit of a HiFi nut and I like my music through my speakers at "realistic" levels.  I live in a detached bungalow, so you're on the right lines here.  All the best to Mrs Herbs.

Cheers Steve 

Zep are my favourite band (Zep IV being my favourite album ever) and they just can't be enjoyed to the full without the volume being wound up 

[KeindeAbiola]

I'm not a mortgage broker, but I can offer some friendly advice. Given your situation, it's worth exploring options like a mortgage or equity release. Although you're retired, eligibility for a mortgage could still be possible depending on your income and other factors. Equity release is designed for retirees and allows you to unlock the value in your home. As for buying a £265k property and releasing £50k equity, it's best to consult with a mortgage broker or equity release specialist to see if that's feasible. They can guide you through the process and help you find the best solution for your needs. I know these financial decisions can be overwhelming, but remember, you're not alone. By the way, I recently came across a Mortgage Broker in Swansea that offers helpful info on mortgages and loans.