# Mortgage when over 60yo/Equity Release



## kellygig (7 Feb 2010)

Advice please,

Parents:-
Mum 60 - Full time work - 26,000
Dad 64 - Unemployed

Home value - 250,000

Mortgage - 4,500 ends 12/10
Home Improvement loan - 20,000 ends 2013

Mortgage Payment - 480pm
Loan payment - 560pm

They want to finish the house once and for all and due to my Dads forced early retirement (worked on building sites all his life) their cash flow has been reduced. They want to borrow a further 10,000 and consolidate the above into one mortgage over 5 years this would leave payments lower than what they are at the moment. They have approached p/tsb (current mortgage provider) they said no due to lack of earnings and age. Also approaced AIB (current account bank) they said no for to many reasons to list, all so ridiculous the assistant was embarressed.

Question 1. Is the mortgage an option and who should they approach?

Question 2. What is the situation with Equity Release Companies? 
I am their only child so no family squabbles over inheritence.

Appreciate any and all advice.


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## PaddyBloggit (7 Feb 2010)

Just a thought ... as you are their sole heir why not get a loan in your name for the improvements? You could have an input into the improvements.

or .... Credit Union would advance loan of that amount if your parents have savings with them. If they haven't, start now and approach later for a loan. You also have the option to pay it off sooner if you can.


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## PaddyBloggit (7 Feb 2010)

Re. Equity Release ... I'd stay away from it for such a small amount of further borrowing .... the cost would be too great.


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## kellygig (7 Feb 2010)

Thank you PaddyBloggit, unfortunately I am not in any position to help in anyway, no savings and a poor credit rating, lesson learnt to late.........
They do have savings in the cu but to take out a new loan would increase their monthly outgoings and put them under pressure. Appreciate the reply.


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## Brendan Burgess (8 Feb 2010)

I don't think that they should borrow any more money. 

On an income of €26,000 they can't afford to pay it off. They will hardly be able to service the interest, never mind the repayments. 

If they are finding the going tough at the moment, they should be able to change the loans to interest only.

Agree with Paddy, home loan reversion/equity release not appropriate for a small amount. 

Is trading down an option? 

Brendan


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## Bronte (8 Feb 2010)

kellygig said:


> They do have savings in the cu but to take out a new loan would increase their monthly outgoings and put them under pressure. .


 
They shouldn't put themselves under financial pressure.  Can't understand on a salary of 26K how they are even able to pay 1040 per month.  What is the interest rate on the current loan, is it from the CU?

What is so urgent that needs doing to the house?  When the mortgage ends this year, they should pay down the other loan earlier and then save to do the work.


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