# Retired couple need to borrow 50k – Advice please



## theoneill (6 Nov 2012)

Hi,

I’m looking for some advice for my partners parents.

Basically they live in a nice four bedroom semi in a nice area of Dublin. The house is in need of renovation and we think that about 50k will be need to do this. They can’t afford this without a loan or equity release of some description so I’m wondering what would be the best way for them to raise this money?

They own their home (mortgage was paid off years ago) and are currently retired. They are in their mid 60’s and have no outstanding debt.

I was thinking about some sort of equity release but I’m not sure if this is appropriate for them. Also would their age exclude them from personal loan?

I think they should get independent financial advice, can anyone recommend a good advisor in North Dublin/

Any advice would be much appreciated. 

Thanks.


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## SarahMc (6 Nov 2012)

Obvious answer, but do they need a 4 bedroom house? Would they consider downsizing to something more manageable and suitable?


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## theoneill (6 Nov 2012)

SarahMc said:


> Obvious answer, but do they need a 4 bedroom house? Would they consider downsizing to something more manageable and suitable?



I don't think downsizing is an option, they love their home and location. They have lovely neighbours so I doubt they would move. Truth be told I would love to live in their location. 

Also there is a constant stream of family staying all the time so I reckon 3 of the four bedrooms are occupied at any one time.


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## Ann1 (6 Nov 2012)

There are a number of grants available from local County Councils that might help with some of the renovations.

[broken link removed]


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## AlbacoreA (6 Nov 2012)

isn't the issue how will they payback the loan?


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## 44brendan (6 Nov 2012)

No bank/B. society will lend to your parents for this proposal. In reality they are unlikely to be in a position where they can afford to repay this money. They need to look at alternative options, which could include a transfer of all/share of the property to family members in return for a family loan or ultimately selling the property if they cannot live in it without these renovations being completed. Forget the prospect of approaching banks. It's not realistic and would do your parents no favours.


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## theoneill (6 Nov 2012)

That's what I'm worried about, Ideally they would be able to take out a loan but given their age I don't think they will quality. 

Perhaps they could some kind of mortgage, but again I don't know how their age will affect this.


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## 44brendan (6 Nov 2012)

Please forget this option. Read my first post! I'm not being harsh, just realistic.


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## Sue Ellen (6 Nov 2012)

theoneill said:


> Also there is a constant stream of family staying all the time so I reckon 3 of the four bedrooms are occupied at any one time.



Let the family members who are going to inherit the house cover the cost of the renovations which they will ultimately benefit from when the house is sold.

Their current free accommodation will also be more comfortable 

Not being smart/harsh here either just looking at it with a realistic view.


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## theoneill (6 Nov 2012)

Sue Ellen said:


> Let the family members who are going to inherit the house cover the cost of the renovations which they will ultimately benefit from when the house is sold.
> 
> Their current free accommodation will also be more comfortable
> 
> Not being smart/harsh here either just looking at it with a realistic view.



I would tend to agree. Personally I think that the adult children should each get a personal loan and pay for the renovations but I don't think this will happen and even if it did I doubt her parents will accept the cash.


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## mf1 (6 Nov 2012)

There is an equity release programme for older folks. 

See this link: [broken link removed]. I have no connection with it. 

Personally, I am not in favour of elderly people taking on debt at all BUT it may work for some people. 

mf


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## Protocol (7 Nov 2012)

You would presume that a retired couple in a "nice" area in Dublin would have at least 50k in savings.

But not in this case.  Makes you think.

My parents are average people, retired, with 200k on deposit and 100k in other assets.


Maybe borrow from their children????


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## Bronte (8 Nov 2012)

Can they afford to service a 50K loan?  Are you sure the costs will be 50K?

Your options are a personal loan from the bank, borrowings from the children, or the equity release.  These quity releases are costly is my understanding and so it might be better if the children 'loaned' the money at zero interest and the parents could pay them back over time, or it would become part of that child's inheritence.


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## theoneill (8 Nov 2012)

Protocol said:


> You would presume that a retired couple in a "nice" area in Dublin would have at least 50k in savings.
> But not in this case.  Makes you think.
> My parents are average people, retired, with 200k on deposit and 100k in other assets.
> Maybe borrow from their children????



I’m not sure of their financial situation but I do have the impression that they do not have much.
They bought in this area a very long time ago and as far as I can tell they did OK, and do cut their cloth to suit their measure.
I don’t think any of the children are in a position to lend them money, unless they are prepared to take out a loan themselves.



Bronte said:


> Can they afford to service a 50K loan?  Are you sure the costs will be 50K?
> 
> Your options are a personal loan from the bank, borrowings from the children, or the equity release.  These equity releases are costly is my understanding and so it might be better if the children 'loaned' the money at zero interest and the parents could pay them back over time, or it would become part of that child's inheritance.



Ideally I think the solution would be for the children to lend the cash and then recoup the money in the form of inheritance. But as I said earlier I don’t think this will happen.

I guess 50K is the worst case, but the house has suffered from neglect in the past 10 years.

I should also mention that there are four children, two of which still live at home.


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## Bronte (8 Nov 2012)

If all the children can not contribute, then the wills can be changed to reflect the fact of the loan.  It's easily done.  And in the interests of family cohesion, everyone should be consulted.


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## theoneill (12 Nov 2012)

Bronte said:


> If all the children can not contribute, then the wills can be changed to reflect the fact of the loan.  It's easily done.  And in the interests of family cohesion, everyone should be consulted.



Thanks for the feedback, I think that they are all going to have to sit down and work this out. 

In terms of inheritance, I think they will recoup much of the investment in the house in the event they have to sell.


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