New mortgage at 65+?

[MrXxxx]

Reading this article I wondered if its actually worth buying when you reach this age, and if you are not just better off getting a long-term rental agreement [for security of tenure] and enjoying spending your capital, or transferring it to offspring [if you have them] free of CGT whilst you can?

https://www.msn.com/en-gb/money/other/do-mortgages-have-an-age-limit-i-m-65-and-rent-but-just-got-an-inheritance-david-hollingworth-replies/ar-AA1n9ReK

[spygirl]

38 minutes ago, MrXxxx said:

Reading this article I wondered if its actually worth buying when you reach this age, and if you are not just better off getting a long-term rental agreement [for security of tenure] and enjoying spending your capital, or transferring it to offspring [if you have them] free of CGT whilst you can?

https://www.msn.com/en-gb/money/other/do-mortgages-have-an-age-limit-i-m-65-and-rent-but-just-got-an-inheritance-david-hollingworth-replies/ar-AA1n9ReK

Well, put the detail in - 

I'm 65 years old and have been in rented accommodation for a number of years now.

I have recently received an inheritance. This could provide for a £85,000 deposit against a £120,000 home. 

What is the chance of getting a mortgage to fund the shortfall?

I am still working and earning approximately £24,000 per year.

 

No issue with that.

35k mortgage, sub 40% LTV.

Might need a broker.

10y mortgage @ 6% - 390/m, 80w. Beer money.

[MrXxxx]

28 minutes ago, spygirl said:

Well, put the detail in - 

I'm 65 years old and have been in rented accommodation for a number of years now.

I have recently received an inheritance. This could provide for a £85,000 deposit against a £120,000 home. 

What is the chance of getting a mortgage to fund the shortfall?

I am still working and earning approximately £24,000 per year.

 

No issue with that.

35k mortgage, sub 40% LTV.

Might need a broker.

10y mortgage @ 6% - 390/m, 80w. Beer money.

OK, but your calculation makes no account for a) the financial 'opportunity' loss on the capital used for the deposit, and b) 'enjoying' using some of this capital before you die/the government uses it for your impending OAP home costs.

[spygirl]

1 minute ago, MrXxxx said:

OK, but your calculation makes no account for a) the financial 'opportunity' loss on the capital used for the deposit, and b) 'enjoying' using some of this capital before you die/the government uses it for your impending OAP home costs.

Its a 35k mortgage FFS.

I assume he buys, and pays the inheritance n mortgage payments, or he tries to invest his 85k and make the much higher rent.

Hes not going to be very rich or the brightest light. And he needs somewhere to live.

This is 100% the right choice.

 

 

 

 

[Micky Roberts]

As an alternative a 65 year old friend has just moved into a really nice over 55s retirement apartment.

Monthly rent of £700 including utilities and maintenance. Only council tax to pay on top.

No worries about heating or other bills and if she runs out of money or can't afford the rent the council will pay provided she spends / hides surplus capital.

Lots of cruises, lunches and a nice car instead of a mortgaged property.

 

 

[spygirl]

1 hour ago, Micky Roberts said:

As an alternative a 65 year old friend has just moved into a really nice over 55s retirement apartment.

Monthly rent of £700 including utilities and maintenance. Only council tax to pay on top.

No worries about heating or other bills and if she runs out of money or can't afford the rent the council will pay provided she spends / hides surplus capital.

Lots of cruises, lunches and a nice car instead of a mortgaged property.

 

 

No. Never. Barge pole.

The service charge bit of the rent will crank up n up

 

 

[Yadda yadda yadda]

1 hour ago, MrXxxx said:

OK, but your calculation makes no account for a) the financial 'opportunity' loss on the capital used for the deposit, and b) 'enjoying' using some of this capital before you die/the government uses it for your impending OAP home costs.

Opportunity cost on £85k is maybe £4k per year. Plus £4.5k per year mortgage. £8.5k per year total. Maybe round to £10k to include maintenance. Got to set that against rent, a cost that will likely increase over time.

If a house in good condition can be had for that price that he wants to live in he should go for it. Security of tenure is worth a lot.

[Frank Hovis]

2 hours ago, MrXxxx said:

OK, but your calculation makes no account for a) the financial 'opportunity' loss on the capital used for the deposit, and b) 'enjoying' using some of this capital before you die/the government uses it for your impending OAP home costs.

 

As to (a) most of us will know that in RL most people see investing as being buying a house or having cash deposits. Of the two the house is the better investment in the long term, and a 65 year old could live for several decades.

(b) is down to character. Would they enjoy throwing money about, or would they regard it as wasting it?

I was horrified by the behaviour of an early stages girlfriend who, despite being in debt, renting, and driving a £500 car, was desperate to display to people in her small town that she was loaded.

She would have the most expensive meals, tip like money was going out of fashion, and talk in an overloud voice about the salary of her next temp job which was double any other local in the pub because it was in London.

For her money was for spending and showing off, had we hooked up I think that bar my house and pension I'd be skint these days and still working.

 

This unsolved local murder struck a chord as this was a bloke who had behaved similarly.

 

In the time after his death, locals had told police and local press that Mr Bate had split opinion by flashing his wealth, cash and gold jewellery around. Martin believes these accounts are false, stating that this “wasn’t true”, and that he “didn’t spend much at all.”

A self-made millionaire, a well-known local and a divisive character - Mr Bate’s home had been raided seven months earlier by burglars who stole £47,000 in cash and property. This, and a missing wallet from his body, was nearly all the police had to go on.

https://www.cornwalllive.com/news/cornwall-news/twenty-years-unsolved-murder-quirky-6938726

Loadsamoney types don't appreciate that they aren't generating respect, and may be attracting attention that they really don't want.

[MrXxxx]

43 minutes ago, Yadda yadda yadda said:

Got to set that against rent, a cost that will likely increase over time

...but you have compounding on your investments returns as well, so need to account for this.

44 minutes ago, Yadda yadda yadda said:

Security of tenure is worth a lot.

You can get this by having a long AST.

45 minutes ago, Yadda yadda yadda said:

If a house in good condition can be had for that price that he wants to live in he should go for it

..but with 'cash' you can drip feed it to your offspring to avoid CGT, can you do this with property i.e. gift a % each year?

[Democorruptcy]

2 hours ago, Micky Roberts said:

As an alternative a 65 year old friend has just moved into a really nice over 55s retirement apartment.

Monthly rent of £700 including utilities and maintenance. Only council tax to pay on top.

No worries about heating or other bills and if she runs out of money or can't afford the rent the council will pay provided she spends / hides surplus capital.

Lots of cruises, lunches and a nice car instead of a mortgaged property.

 

 

That's cheap, where is it, which firm?

[Micky Roberts]

6 minutes ago, Democorruptcy said:

That's cheap, where is it, which firm?

https://www.anchor.org.uk/our-properties/properties-for-rent/search-results

[MrXxxx]

1 hour ago, Frank Hovis said:

 

As to (a) most of us will know that in RL most people see investing as being buying a house or having cash deposits. Of the two the house is the better investment in the long term, and a 65 year old could live for several decades.

(b) is down to character. Would they enjoy throwing money about, or would they regard it as wasting it?

I was horrified by the behaviour of an early stages girlfriend who, despite being in debt, renting, and driving a £500 car, was desperate to display to people in her small town that she was loaded.

She would have the most expensive meals, tip like money was going out of fashion, and talk in an overloud voice about the salary of her next temp job which was double any other local in the pub because it was in London.

For her money was for spending and showing off, had we hooked up I think that bar my house and pension I'd be skint these days and still working.

 

This unsolved local murder struck a chord as this was a bloke who had behaved similarly.

 

In the time after his death, locals had told police and local press that Mr Bate had split opinion by flashing his wealth, cash and gold jewellery around. Martin believes these accounts are false, stating that this “wasn’t true”, and that he “didn’t spend much at all.”

A self-made millionaire, a well-known local and a divisive character - Mr Bate’s home had been raided seven months earlier by burglars who stole £47,000 in cash and property. This, and a missing wallet from his body, was nearly all the police had to go on.

https://www.cornwalllive.com/news/cornwall-news/twenty-years-unsolved-murder-quirky-6938726

Loadsamoney types don't appreciate that they aren't generating respect, and may be attracting attention that they really don't want.

..and the problem is if 'you' [he] gave the impression of being loaded [even if he wasn't] in the cases of violent burglary they will not believe you when you give them everything you really have, think you are holding back, and so torture to get the 'extra'.

[Frank Hovis]

1 minute ago, MrXxxx said:

..and the problem is if 'you' [he] gave the impression of being loaded [even if he wasn't] in the cases of violent burglary they will not believe you when you give them everything you really have, think you are holding back, and so torture to get the 'extra'.

 

Indeed.

And word will have got around the criminals about the previous near £50k haul.  There can't be many domestic burglaries that will return anything like that.

[Royston]

6 hours ago, spygirl said:

No. Never. Barge pole.

The service charge bit of the rent will crank up n up

 

 

That being said renting a retirement apartment certainly makes a lot more sense than buying one, my dad bought a new build one in 2007 for £135k.

He died in 2010, anyone like to take a guess what we sold it for in 2012 after2 years on the market?...

[reformed nice guy]

29 minutes ago, Royston said:

That being said renting a retirement apartment certainly makes a lot more sense than buying one, my dad bought a new build one in 2007 for £135k.

He died in 2010, anyone like to take a guess what we sold it for in 2012 after2 years on the market?...

135?

[Royston]

4 minutes ago, reformed nice guy said:

135?

Close.

Remove the first digit and you're spot on.

Well, minus the £3.5k a year that it cost in Service Charges, Ground Rent and Council Tax for the 2 years it was on the market.

So £28k all in.

[Wight Flight]

6 hours ago, Frank Hovis said:

 

Indeed.

And word will have got around the criminals about the previous near £50k haul.  There can't be many domestic burglaries that will return anything like that.

Erm...

[spygirl]

1 hour ago, Royston said:

That being said renting a retirement apartment certainly makes a lot more sense than buying one, my dad bought a new build one in 2007 for £135k.

He died in 2010, anyone like to take a guess what we sold it for in 2012 after2 years on the market?...

40k

[Frank Hovis]

4 minutes ago, Wight Flight said:

Erm...

 

Eh?  Well I suppose if the car is stolen.

I was just going on the basis of the homes I know fairly well and a burglar would struggle to take items that would fetch him a grand when sold illicitly. The most valuable items in my house would be the two settees, good luck taking those.

[Wight Flight]

1 minute ago, Frank Hovis said:

 

Eh?  Well I suppose if the car is stolen.

I was just going on the basis of the homes I know fairly well and a burglar would struggle to take items that would fetch him a grand when sold illicitly. The most valuable items in my house would be the two settees, good luck taking those.

My claim was just shy of £50k.

I doubt the pikeys got more than £5k for it though.

[PatronizingGit]

2 hours ago, Royston said:

Close.

Remove the first digit and you're spot on.

Well, minus the £3.5k a year that it cost in Service Charges, Ground Rent and Council Tax for the 2 years it was on the market.

So £28k all in.

Thing is, it did probably cost nearer £135k than £35k to build.

The whole thing is some kind of distorted combination of the cost of old age care & British peoples obsession with property ownership even when they are at deaths door & should perhaps be having other things on their minds.

[One percent]

7 minutes ago, PatronizingGit said:

Thing is, it did probably cost nearer £135k than £35k to build.

The whole thing is some kind of distorted combination of the cost of old age care & British peoples obsession with property ownership even when they are at deaths door & should perhaps be having other things on their minds.

The problem is, at least here, you can’t secure sheltered accommodation if you have your own home.  You are expected to sell up and move into one of these macarthy and stone places whilst all the local sheltered accommodation is given to wessie and smoggy scratters.  

[Van Lady]

28 minutes ago, One percent said:

The problem is, at least here, you can’t secure sheltered accommodation if you have your own home.  You are expected to sell up and move into one of these macarthy and stone places whilst all the local sheltered accommodation is given to wessie and smoggy scratters.  

It’s the same in Dumfries & Galloway.

Recently a very nice social housing project has been built in my rural town. Very nice indeed! It’s got decent space between homes plus a huge very nice central open space. It’s a mixture of one bed to four bed. Much better spacing than the new build bungalows etc. for sale.

Who’s living there? A few locals who got lucky due to being down in life’s lottery, non home owners needing a smaller or bigger place but mainly folk from all around the uk who have got lucky. FFS within 5 mins they can walk to the shore or 10 mins they can access a beautiful river walk. From what I’ve heard there are very few local folk living there.

Like you, I’ll probably never have access to a home like that because too much money 🙄….got a paid up house, occupational pension and paid up for full state pension through working for that life position for many years!

 

[One percent]

Just now, Van Lady said:

It’s the same in Dumfries & Galloway.

Recently a very nice social housing project has been built in my rural town. Very nice indeed! It’s got decent space between homes plus a huge very nice central open space. It’s a mixture of one bed to four bed. Much better spacing than the new build bungalows etc. for sale.

Who’s living there? A few locals who got lucky due to being down in life’s lottery, non home owners needing a smaller or bigger place but mainly folk from all around the uk who have got lucky. FFS within 5 mins they can walk to the shore or 10 mins they can access a beautiful river walk. From what I’ve heard there are very few local folk living there.

Like you, I’ll probably never have access to a home like that because too much money 🙄….got a paid up house, occupational pension and paid up for full state pension through working for that life position for many years!

 

Something really isn’t right when local housing isn’t used for local people. My guess is that it’s just another way of diluting and destroying local communities.  

[Van Lady]

3 minutes ago, One percent said:

Something really isn’t right when local housing isn’t used for local people. My guess is that it’s just another way of diluting and destroying local communities.  

Agree!