CU Loans for pensioners with no income, but own their own house?

BoardsieKKV

BoardsieKKV

Registered User
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Hi folks,

Rang my local CU today but couldn't get through. Figured I'd throw a question up here in the off chance anyone may know.

My dad is 70, and retired, claiming a state pension. So no 'real' income. However, he does own his house outright. He's getting a bit older now and looking to stick a bedroom into the ground floor, with a cost of approx €30k.

Would the CU lend in these circumstances? Presumably they can get a legal charge on the house so they can recoup if he decides not to repay (or dies)? I have told him I'd go guarantor on the loan (I'm also a CU member) but I don't think Guarantors are a thing anymore?


Anyone got any advice at all? Or other suggestions on perhaps a better approach to doing this?

Cheers
 
Does your local council do any grants for adding on for mobility issues? I know we got one for my father but that is a good few years ago, like your Dad only state pension and owned the house. The grant didn't cover the lot but it was a nice contribution! Put on bathroom/bedroom, his house was assessed in case a stairlift would work but it wouldn't so no option but to build on.

He wasn't that bad mobility wise when he got the grant, he had his hip replaced but could see the stairs was going to be a problem long term.
 
Like monbretia says check with local council. We are in the process of getting all the assessments done for the application.
 
Make sure you read the small print on seniors money or equity release type loans. The seniors money is 5.5% interest at the minute Over the length of the loan. You pay at the end of the loan.
There were issues on such type of loans in the Uk. You may have to pay back after 10 years, or going into residential care or long turn care. Some people lived longer than expected and were forced to sell their home.
Cu will not take charge of the house or provide the type of loan you are looking for. They will expect repayment.
 
I do not know your situation. Would you not try to get a loan yourself and repay it? 30k would be the price of a car. The cu may give you a loan sooner than your parents if you are working. You may eventually get the house when your parents die.
 
Sconeandjam said:
There were issues on such type of loans in the Uk. You may have to pay back after 10 years, or going into residential care or long turn care. Some people lived longer than expected and were forced to sell their home.
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That was some years ago and since then all of these loans have a "no negative equity" guarantee.

If he is 70 and borrows €30,000 for 30 years @5.5% and pays back nothing in the meantime, he will owe €150,000.

If he pays the €140 a month interest, then he will owe €30k after 30 years.

And because of a quirk in the market, it's likely that he will be able to pay off the loan any time without penalty.

A Credit Union Loan at, say, 9% would be far more expensive and would probably have to be repaid within 7 years.

Brendan
 
Sconeandjam said:
Would you not try to get a loan yourself and repay it?
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The downside of any mortgage-based product such as Seniors Money is that the charges of setting it up might be quite a high percentage of a €30k loan.

If the OP has a mortgage on their own home and can get a top up of €30k, there would be no set-up fees and the interest rate would be lower.

Brendan
 
RetirementPlan said:
How does he plan to repay the loan?
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Would he need to?

Paying 5.5% on €30k for life is €31 a week. It's not a small amount of his state pension but not crippling either and the quality-of-life improvement may be worth it.

Children could also help out here. No tax implications as amounts are small and they wouldn't see any reduction in their inheritance.
 
NoRegretsCoyote said:
Would he need to?

Paying 5.5% on €30k for life is €31 a week. It's not a small amount of his state pension but not crippling either and the quality-of-life improvement may be worth it.

Children could also help out here. No tax implications as amounts are small and they wouldn't see any reduction in their inheritance.
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Will a CU give out an indefinite interest-only loan on that basis?

I'd imagine any CU would need a realistic plan to repay.
 
It’s Seniors Money that’s being alluded to.

These products got a bad name because of clowns on the Joe Duffy Show and greedy children trying to move the goalposts after the fact.

The Seniors Money product is an exceptional one and a potential lifesaver for many asset rich / cash poor retirees.

If kids are that worried about their inheritance and the power of compounding, they can cover the interest and then inflation becomes their friend.
 
I believe there may still be grant aid available for this. That should be your starting point

Housing Aid for Older People Grant

Grants are available to improve the homes of older people so that they can stay in their own homes for as long as possible.
www.citizensinformation.ie www.citizensinformation.ie
 
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