Early 70s - bank loan request declined - what to do next?

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Lightmyfire

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Posting on behalf of a friend.
Her parents are in their early 70s and are both retired.
House worth €1m - mortgage fully paid.
They are looking for a €30k loan for home improvements. Ideally wanted to take an interest only loan and release equity from the value of the house.
They have been refused by their bank.
Advice would be appreciated on the best approach for them to take.
 
They are not in a position to service full repayments on a 30k loan ... but can cover the interest payments. This is why they are considering releasing equity in their home.
What they really want to know is whether this is feasible?
 
Can't see this being feasible. Especially in the current financial climate why would a lender advance an interest only loan to a couple of 70 year olds with (presumably) limited income?

I don't understand your points here:
Lightmyfire said:
Ideally wanted to take an interest only loan and release equity from the value of the house.
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Lightmyfire said:
can cover the interest payments. This is why they are considering releasing equity in their home.
Click to expand...
Could they trade down?
 
They could sell their house to some of those firms like SHIP etc that will give them cash whilst allowing them to live in their home?
 
I believe a few of those equity release schemes for the elderly have now stopped lending, for now at least. Quite a bit about these schemes available by googling- financial regulator has booklet available for eg. It has to be said that they are last resort type schemes ( but if you really HAVE to avail of them some are better than others so best to read up on them well before committing).

Assuming the house will be inherited by one or more children the best thing to do might be for the children to come up with this money now.

Without knowing more about their income there isnt much more that can be suggested.
 
Can't see how tradinng down addresses the issue posted. The cash is for "home improvements"
To be honest, I think if they cannot service a 30K loan, then they shouldn't get one. At their stage in life, the last thing they would want is to be stressed out with loan repayments, for the sake of some home improvements. In addition, they could conceiveably overrun on the cost of improvements and where would that leave them?
 
amgd28 said:
Can't see how tradinng down addresses the issue posted. The cash is for "home improvements"
Click to expand...
Er - trade down to a house that needs no home improvements. And perhaps pocket a CGT free lump sum to boot. Just another option.
 
I have no connection with BOI. Just know that they do this type of loan:

[broken link removed]

You don't have to make repayments until you sell your house/die/leave for a period of time (for eg to go into nursing home)
 
Children looking for an inheritance just love those type of loans. :D
If you live to be a 100 the kids will have nothing left I suspect. Also I take these type of loans are a gamble for the bank as they would be estimating when the householder will die so they can work out when they will get their house back?
 
Why don't they sit down with the children and have a frank discussion about inheritance.The children should step up and do something to help. Afterall, some day it will be theirs.
Have they looked in to a covenant from the children to the parents? Tax relief is available on the payments.
 
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