Buy-to-let loans for over-70's?

antoinolachtnai

Is there anyone who can help out with this? The couple involved has over a million euros of equity in property already, which they are prepared to provide as security. They want to buy another residential property worth around 300,000. They are experienced with letting property, and have steady rental income at the moment. They have no problem making interest-only payments for the next two years until a current mortgage is paid down, and no problem paying down the rest within 8 years. (They can do this because they will benefit from tax incentives on the property.

There is an equity release package that BoI does, but it seems hopelessly structured and tremendously overpriced for what my friends want. It involves committing to a high, fixed interest rate for 15 years.

Any ideas?

Seany

There is a company on the market called SHIP (Shared Home Investment Plan) who offer finance for those over 68/70yrs with NO repayments.

Basically, the couple will sell a portion of their home & the asset has to be sold upon death where the capital isthen repaid (+ interest costs i presume)

This product may not suit everyone but may provide an alternative option. Talk to a financial adviser or let me know if you require anything further.

Sean

antoinolachtnai

Seany wrote:

There is a company on the market called SHIP (Shared Home Investment Plan) who offer finance for those over 68/70yrs with NO repayments.

Basically, the couple will sell a portion of their home & the asset has to be sold upon death where the capital isthen repaid (+ interest costs i presume)

This product may not suit everyone but may provide an alternative option. Talk to a financial adviser or let me know if you require anything further.

Sean

Thanks for the suggestion, but SHIP, like LifeLoan is an expensive and crude way of raising capital. It does make sense if you own your home and nothing else, are adamant that you don't want to move out of your home, and you aren't expecting to live more than 10 or 15 years (because you can obviously only do this once).

The other problem with SHIP/LifeLoan is that if you aren't paying interest, you can't benefit from the 'tax shield' that paying back a mortgage on rented accommodation gives you.

Zascar

try www.rrl.ie - better then SHIP

antoinolachtnai

It's still almost as bad as SHIP though.

Why are these ambulance-packages all they can get? These people have no problem paying the interest.

De Rebel

The way you phrase your original post suggests that the million euros in equity is comprised of more than one property, and that they are deriving rental income from one or more properties other than the one they live in. This is important to avoid family home issues. Assuming that the second property or properties combined is/are worth in excess of 300K, then that should be security enough for the bank to provide an interest only loan. I can't see any issues with that.

Remember that the key issues for a bank are (1) evidence of capibility to repay the loan (2) security in the event of default. Number one is either fact or its not, and should be clearly demonstrable. Number two well they will presumable have the deeds of the new property and can augment these with deeds of an existing property (other than the family home) if necessary.

What did the bank manager say?

antoinolachtnai

Yup, the equity is in the home and in another rental property which is within 18 months of the end of the mortgage. There's income from pensions and income from rental too.

They were around a number of places. Basically, it is being intimated that her age is the issue. Some places said that they didn't have a product to suit the circumstance.