How to get a 70+ into their own home / mortgage
Discussion
Hi all
Wonder if anyone had any advice or experience before I go down the mortgage broker conversation route.
70 year old relative needs a home of their own. Would need something like 100/150k on a mortgage. Would need some help in some way, which I can provide. Eg.they cover the mortgage but I help with food and bills, or I contribute towards mortgage, they do part mortgage, food and bills.
How realistic is it and whats the best way of getting them into their own home, vs. what they are currently doing which is paying a chunky amount of rent to a local authority landlord for a house that needs a tonne of work, and is not getting done.
Cheers
Wonder if anyone had any advice or experience before I go down the mortgage broker conversation route.
70 year old relative needs a home of their own. Would need something like 100/150k on a mortgage. Would need some help in some way, which I can provide. Eg.they cover the mortgage but I help with food and bills, or I contribute towards mortgage, they do part mortgage, food and bills.
How realistic is it and whats the best way of getting them into their own home, vs. what they are currently doing which is paying a chunky amount of rent to a local authority landlord for a house that needs a tonne of work, and is not getting done.
Cheers
If they’re currently paying the Council then are you looking to go down the Right To Buy route?
ETA when you say "chunky amount" social housing rent is usually at 80% of market rate (that's why there's a huge waiting list) and you should be getting all your repairs and maintenance done for free. If you're not getting repairs done in a timely manner there are lots of Solicitors who are willing to take on disrepair claims as it means £££ for them. And what happens if they have to move into a Care Home?
So I'm not sure why the 70+ year old would want to take on a mortgage at their age as well as all the hassle of repairs & maintenance when they're not likely to be around to enjoy it much longer.
ETA when you say "chunky amount" social housing rent is usually at 80% of market rate (that's why there's a huge waiting list) and you should be getting all your repairs and maintenance done for free. If you're not getting repairs done in a timely manner there are lots of Solicitors who are willing to take on disrepair claims as it means £££ for them. And what happens if they have to move into a Care Home?
So I'm not sure why the 70+ year old would want to take on a mortgage at their age as well as all the hassle of repairs & maintenance when they're not likely to be around to enjoy it much longer.
Edited by Countdown on Sunday 11th February 12:08
What's the LTV? If they need to borrow £100K, but are buying for £200K+, they could approach L&G for a lifetime interest only mortgage.
They borrow £100K to buy their £200K house, they pay interest only until they die. They die owing £100K, house is sold (maybe for more than £200K), L&G get their £100K back and the balance goes into their estate.
They borrow £100K to buy their £200K house, they pay interest only until they die. They die owing £100K, house is sold (maybe for more than £200K), L&G get their £100K back and the balance goes into their estate.
Thanks for all the replies, appreciated. Will try to answer everything.
No extra benefits that I know of.
Right to but might be an option but they house itself is not suitable long term, and needs a tonne of work. Only worth it for the potential to renovate and move on, but I think there is a minimum stay condition, and I don't think the potential discount will be worth it against the spend needed.
Probably looking at 200-250k range with 100-150k mortgage.
IO option looks like a good option. I am not sure whether it would be best to pay as little as possible with mo equity or try to build equity.
No extra benefits that I know of.
Right to but might be an option but they house itself is not suitable long term, and needs a tonne of work. Only worth it for the potential to renovate and move on, but I think there is a minimum stay condition, and I don't think the potential discount will be worth it against the spend needed.
Probably looking at 200-250k range with 100-150k mortgage.
IO option looks like a good option. I am not sure whether it would be best to pay as little as possible with mo equity or try to build equity.
menousername said:
Right to but might be an option but they house itself is not suitable long term, and needs a tonne of work. Only worth it for the potential to renovate and move on, but I think there is a minimum stay condition, and I don't think the potential discount will be worth it against the spend needed.
Probably looking at 200-250k range with 100-150k mortgage.
IO option looks like a good option. I am not sure whether it would be best to pay as little as possible with mo equity or try to build equity.
I appreciate you're not trying to do this but it's VERY common in Social Housing - elderly relatives being encouraged to buy their Council house using "gifts" from friends/family, mainly so that the beneficiaries can benefit from the significant RTB discounts once elderly relatives have popped their clogs.Probably looking at 200-250k range with 100-150k mortgage.
IO option looks like a good option. I am not sure whether it would be best to pay as little as possible with mo equity or try to build equity.
I'm surprised that it need a lot of work doing. The house should at the very least comply with the Decent Homes Standard. Social Housing tends to have capital repair programmes (where doors, windows, bathrooms, kitchens, even roofs are replaced on a regular basis). From what I remember kitchens and bathrooms were replaced every 10-15 years, roofs every 30 years so there shouldn't be much in the way of structural work. if there IS then it needs reporting to the Council/ALMO/Housing Association.
The thing is - in social housing all the R&M work is the responsibility of the Landlord. When they buy their own property all that hassle becomes theirs to manage. The discounted rent will probably be more than outweighed by the interest payments.
Countdown said:
menousername said:
Right to but might be an option but they house itself is not suitable long term, and needs a tonne of work. Only worth it for the potential to renovate and move on, but I think there is a minimum stay condition, and I don't think the potential discount will be worth it against the spend needed.
Probably looking at 200-250k range with 100-150k mortgage.
IO option looks like a good option. I am not sure whether it would be best to pay as little as possible with mo equity or try to build equity.
I appreciate you're not trying to do this but it's VERY common in Social Housing - elderly relatives being encouraged to buy their Council house using "gifts" from friends/family, mainly so that the beneficiaries can benefit from the significant RTB discounts once elderly relatives have popped their clogs.Probably looking at 200-250k range with 100-150k mortgage.
IO option looks like a good option. I am not sure whether it would be best to pay as little as possible with mo equity or try to build equity.
I'm surprised that it need a lot of work doing. The house should at the very least comply with the Decent Homes Standard. Social Housing tends to have capital repair programmes (where doors, windows, bathrooms, kitchens, even roofs are replaced on a regular basis). From what I remember kitchens and bathrooms were replaced every 10-15 years, roofs every 30 years so there shouldn't be much in the way of structural work. if there IS then it needs reporting to the Council/ALMO/Housing Association.
The thing is - in social housing all the R&M work is the responsibility of the Landlord. When they buy their own property all that hassle becomes theirs to manage. The discounted rent will probably be more than outweighed by the interest payments.
We have relatives (a family of two parents and four children) who rent a property managed by a housing association, and the county council is the landlord. The property had a major repair needed and neither the HA or CC was interested in taking responsibility and effecting the repair. I offered to work with the family to make a formal complaint. It took a few months but we achieved an excellent result: the repairs were made, damaged furniture was replaced, and a reasonable amount of compensation was paid too. This was all dealt with by the HA. Bear in mind that there's a Housing Ombudsman so any unresolved complaints can be taken there for final resolution etc.
R
Appreciate what you are saying.
Unfortunately a lot of work needed that seems never to get done. Occasional inspections happen but the work is never done. Relative in question does not want to make a fuss though, to be honest. It does seem that it would require a complaint, chased and followed up, for much of the house.
Even things that have been done to bring up to code over the years, we have discovered were bodged by the contractors and need redoing.
But mostly the house is not suitable long-term in terms of location and future-proofing for old age.
Bit of a conundrum
Unfortunately a lot of work needed that seems never to get done. Occasional inspections happen but the work is never done. Relative in question does not want to make a fuss though, to be honest. It does seem that it would require a complaint, chased and followed up, for much of the house.
Even things that have been done to bring up to code over the years, we have discovered were bodged by the contractors and need redoing.
But mostly the house is not suitable long-term in terms of location and future-proofing for old age.
Bit of a conundrum
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