Give my house back to the bank on my death???

M

maxwl

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Hi all

I have a unusual query which I hoped someone here might have advice on or experience of.

I will be 60 years of age in a few month's time. I took out a 25 year mortgage 13 years ago in 2001, quite late in life for such a long-term mortgage. Obviously I therefore have 12 years remaining. The mortgage was for €146,000 and I still have €90,000 remaining to pay. I will be 71 years of age when I have finally paid off my mortgage.

I'm currently unemployed. I have been for some time and as time passes it looks less likely that I will be getting a good long-term position. I am single with no intention of getting married at this stage. I have brothers but we are not really a close family.

I have, therefore, been considering contacting my bank and offering to give them back my house on my death if I can arrange to have my mortgage paid off now and also a cash sum given to me. At present my house is worth approx. €150,000.

Does anyone have any experience of this kind of thing? Or even heard of a bank doing this? I just thought I'd ask around here first before approaching my bank.

Thanks in advance.
 
You are talking about a home equity release plan. I think the banks used to do them back in the day (certainly did in UK and US, where they were called HELOC, home equity line of credit) but I'd be very surprised if they did them nowadays. Someone else might be better informed.
 
You have a house worth €150k with a mortgage of €90k and you are aged 60.

You want to live in this rent-free until you die - probably in 30 years time.

This would be of no interest to a bank or anyone else.

If you are struggling with the mortgage, ask the lender to put you on interest only. Assuming you are on a variable rate of around 4.5%, this would reduce your monthly repayments from around €860 a month to €340 a month.

When you die, the house will be sold and the mortgage will be paid off.

Unfortunately, lenders are not thinking clearly about these issues and will probably refuse. But they might give you 5 years interest only.

Brendan
 
Thanks all for replies.

Brendan.

Do you recommend that I contact my bank (PTSB) directly about this type of matter or perhaps go through some sort of intermediary.

Thanks for help.
 
maxwl said:
Thanks all for replies.

Brendan.

Do you recommend that I contact my bank (PTSB) directly about this type of matter or perhaps go through some sort of intermediary.

Thanks for help.
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Contact them yourself in the first instance.
Banks are becoming more sensible in how they approach issues.
You will find they will want you to show income/expenditure etc called a Standard Financial Statement.It is a longish form .
They review that and will come back to you.
I would think it highly unlikely that they will entertain a few bob up front on house value.
As Brendan suggests , can you afford interest only ?
If so they may give you a revolving interest only mortgage.

Take it slow and cool and you should be OK in the house but I don,t see you getting any (free) cash from it.
And keep copies and try not to work over the phone.
 
Just to note that if you do ever consider an equity release scheme, be very wary of the terms & conditions, these can include clauses such as, if you vacate the house for 6 months the bank/finance company can take the house at that point even though you haven't died. So, if you had a long stay in hospital or in a nursing home, your house could be taken. Tread carefully, anyone considering this, and get a good solicitor to look over the terms & advise you. (I'm not a solicitor I just know someone who nearly got into difficulty with this)
 
A few years ago the banks were selling these equity release schemes but I don't think they ever offered 60% LTV to a 60 year old!
 
haven't the councils got a policy where they buy houses from older people and re-house them in a smaller (usually 1 bedroom) unit?
as far as i know their policy is they take 30% of the sale price,the home owner keeps the rest and is re-housed.
if you owned your house outright it would cost the council 105 k to buy you out and still have to re-house you, to buy your house now it would cost them 90 k,maybe approach them and ask if they would be willing to do this, they might even stretch to 105 k and you would get 15 k for yourself?
 
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