over 75 mortgages

  • Thread starter Thread starter GAC
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GAC

GAC

GAC

Soldato
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well im rather ticked off at the mo, been trying to help my parents aged 71 and 73, get a mortgage for there council house on right to buy.

but seems no one will give them one due to them being 75 in the life of the mortgage, after having a rather pointless discussion with the halifax all they can say is "we dont do them as its too much risk" but they did agree if we had asked pre 2008 they could have been 80 years old and they would have lent the money.

talk about a broken system. :mad::mad::mad::mad:
 
how much is their RTB costing?


could be worth you taking out a loan for your parents (i'd imagine you'd be inheriting the property should anything happen anyway)
 
ok cant get it in my name as iv not worked for nearly 2 years. if i could i would.

as for the system being broken, they can afford the mortgage repayments over 10 years as all they want is £20k, it would work out about £150 less per month than they already pay.
 
GAC said:
ok cant get it in my name as iv not worked for nearly 2 years. if i could i would.

as for the system being broken, they can afford the mortgage repayments over 10 years as all they want is £20k, it would work out about £150 less per month than they already pay.
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The risk isn't default risk. It's longevity risk.
 
true enough,

taken from the ons website. The most common age at death in England and Wales in 2010 was 85 for men and 89 for women.

so a 10 year mortgage would take my mother to 83 and father to 81. guess the banks use there own list of mortality rates.
 
Bank loan? Maybe tricky.

What about one of those lenders who takes a charge over the property on an equity release type thing? TYpically they are not a great plan, but if it ends up being the difference on getting the house or not it may be the best of a bad situation.

Even one of the peer to perr lending things. They would probably be considered quite ow risk by most. NOt sure if you can borrow that much on peer to peer sites though
 
from what iv been told by a finance guy the only option that MAY work is a loan in my parents name, but he says even then theres a chance the banks will just laugh due to there age and the amount.
 
GAC said:
true enough,

taken from the ons website. The most common age at death in England and Wales in 2010 was 85 for men and 89 for women.

so a 10 year mortgage would take my mother to 83 and father to 81. guess the banks use there own list of mortality rates.
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estebanrey said:
80.4 according to World Bank...

https://www.google.co.uk/publicdata...=country:GBR&dl=en&hl=en&q=life expectancy uk
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They will have actuaries to calculate where they feel there is too much risk. Funnily enough, using the ONS/World Bank was how they worked out how to lend to in the good old bad old days. ;)
 
Seems reasonable to me. If your parents die during this time, then the bank will suffer (woe is them), and trying to get a life policy at this age would be farcical. If they won't lend, you'll need to find another way. Bank loan for instance
 
Lucero said:
Seems reasonable to me. If your parents die during this time, then the bank will suffer (woe is them), and trying to get a life policy at this age would be farcical. If they won't lend, you'll need to find another way. Bank loan for instance
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honestly id have expected them to jump at this. £20k mortgage for a £65k valued house (they sell for 90k normaly this is a council one atm dont forget).
 
I agree, the figures look ok, but there's another side to this, and it's a shame that this may well be the case, but, there won't be a lot of money in it for the bank. Ultimately they can use the age as an excuse, but at current rates (4.5% as an example - and, it's unlikely this will change any time soon), the bank will make £4k over ten years. That's not worth getting out of bed for when it comes to mortgages.

This will be much better dealt with as a normal bank loan (as it's sub £25k).
 
GAC said:
guess the banks use there own list of mortality rates.
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Banks lending procedures are largely governed by the FSA.

The risk is that there will be a death during the term of the mortgage which will lead the bank to have to recover the loan after probate if a sole applicant, or possibly not have the other party not in a position to pay for some time after death of the other party.

The last thing a lender wants to do is evict and old person due to bad press, but that is the risk in the loan at their respective ages.

It may be harsh, but it is entirely reasonable from the viewpoint of a lender.

Just get them both to take out a £10k loan in each their own names and be done with it.
 
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