Possibility of getting a mortgage - 70 + Yr old

A

Agent 47

Registered User
Messages
90
With two properties mortgage free would a widowed person aged 70+ on the state pension + Private pension + income from 2 rentals get even a 5 yr mortgage to move to a smaller house?

I have suggested a re-mortgage of one rental that will be more tax efficient to offset against rental income.

What would be the pros and cons? Would mortgage protection insurance be required or would it be prohibitive because of the age of the person?
 
Highly unlikely I would think. Even if you could remortgage one of the rentals to buy new home to live in that wouldn't give you a tax advantage as the purpose of the funds would not be for the rental property.

If and it's a big if they managed to get one they would not be obliged to take out mortgage protection but banks can make their own policy on this and may not do a mortgage without some cover, have they any existing cover they could assign? Taking out cover at this age is likely to be prohibitively expensive.

Is there anyone younger with an income than could go on a mortgage jointly with them? That might be your only hope.
 
Monbretia said:
Highly unlikely I would think. Even if you could remortgage one of the rentals to buy new home to live in that wouldn't give you a tax advantage as the purpose of the funds would not be for the rental property.

If and it's a big if they managed to get one they would not be obliged to take out mortgage protection but banks can make their own policy on this and may not do a mortgage without some cover, have they any existing cover they could assign? Taking out cover at this age is likely to be prohibitively expensive.

Is there anyone younger with an income than could go on a mortgage jointly with them? That might be your only hope.
Click to expand...
Fully agree with above response!
 
Agent 47 said:
With two properties mortgage free would a widowed person aged 70+ on the state pension + Private pension + income from 2 rentals get even a 5 yr mortgage to move to a smaller house?
Click to expand...

I must be missing something here. Why do they need a mortgage to move to a smaller house? Why don't they just sell their existing home and buy a smaller house?

If they are aged 70+, they probably have a large capital gain on their family home. This could cause them a problem if they rent it out for a few years and then sell it.

It's so much cleaner to sell the home. It's probably not appropriate for a 70 year old to have the hassle of being a landlord.

Brendan
 
What is the basis for this definitive response Steven. Is it purely age related? I will respond to Brendans response in a moment but not every situation is black and white. We are talking of a 65% LTV requirement.
 
Brendan Burgess said:
I must be missing something here. Why do they need a mortgage to move to a smaller house? Why don't they just sell their existing home and buy a smaller house?

If they are aged 70+, they probably have a large capital gain on their family home. This could cause them a problem if they rent it out for a few years and then sell it.

It's so much cleaner to sell the home. It's probably not appropriate for a 70 year old to have the hassle of being a landlord.

Brendan
Click to expand...

The person in question moved from the family home 6 years ago.
To facilitate an illness issue they acquired a large bungalow property on which there is currently substantial negative equity.
The person in question would prefer to rent this property out and move to a smaller property with an LTV requirement of 65%.
The quality of property they are looking at is quite varied and poor, asking prices in my view are 40 k above what the property should be fetching. The LTV could well be 50% up to a max of 65%.

The key question is what is preventing this active healthy 70+ widowed person (and parent of mine) getting a relatively low mortgage which will be paid with pensions and rental incomes?
Should they go the independent mortgage route?
 
I can only state my own experience about bank lending over 70. I was looking for a loan for an investment property which I was purchasing. I was trying for a medium term mortgage from AIB with whom I have dealt with all my lifetime and I have had an absolute perfect repayment record. It was for less than 50% of the value of the property. Everything else stacked up. AIB would not go beyond a term after my 70th Birthday even though at age 70 there would be less than 15% of the mortgage outstanding. So they would not lend beyond 70 and on principle I left them and let them know why. I did not take my Tracker mortgages from them and I will be well over 70 when they are finished:p
Bank of Ireland were more flexible with my proposal and would have given me the loan even though I had never stood in a Bank of Irl premises in my lifetime. I would emphasise again that at age 70 I would only be owing less than 15% of the original mortgage.
Yes there is an ageism attitude in the Banks rightly or wrongly. Funny how you could get a mortgage up to 80 in the "boomier" times without a problem.
I do not know about how the sums stack for repaying it in a 5 year time frame but have you got a quote for a 5 year mortgage protection policy or equivalent.
Life expectancy in Ireland is currently over 78 for male & 83 for females.
 
Bank policy is the answer to why it won't work, most banks have a policy of not lending for mortgages that end past 70th birthday. You may see that as age discrimination but it's just a risk rule, greater chance of person not seeing out the end of mortgage, no life cover so much wait for house to be sold or some other solution to debt, banks don't want that sort of hassle.

Also when I worked in the bank we were always told look at worst case scenario when assessing risk, you are in court looking for repossession, listen to the case as the judge hears it, bank loaned retired 70yr old with nothing only pension thousands and now when he can't pay (remember worst case scenario) the bad bank wants to kick an old man out of his house.

Selling one property to buy the smaller house is the most logical option if there is not a younger person with income to apply jointly with him for a mortgage.
 
Monbretia, I see your point. Pension stops upon death with only rental income to continue payment of a loan. Best case is for me to go jointly on the loan.
 
You must log in or register to reply here.
Back
Top