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Our property investment expert is Jeni Browne, Sales Director at
Mortgages for Business
www.mortgagesforbusiness.co.uk/
Tel: 0345 345 6788
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Question
Mortgage in retirement: Can my parents get a small mortgage?
I wonder if you can help. My mum and dad would like to build an extension on their home and have had quote for, in the region of, £50k. They cannot afford this as they only have £17k of savings so they were looking at getting a loan. However, someone has mentioned they may be able to get a mortgage – which would obviously mean lower rates.
Mum is 73 and Dad is 83 so we are not even sure they are eligible for a mortgage. Also Dad is not keen on having to repay monthly. Their income from their pension is £3,500 a month and they usually have £500 remaining which they save for short-term events such as holidays and Christmas. Are there any later life mortgages? They are not keen on equity release.
Answer
The good news is that there are going to be several options available to your parents, although the requirement not to make a monthly payment will undoubtedly limit this.
You mention that they aren’t keen on equity release, although if they do not want to make monthly repayments, this is likely their best route.
The best advice I can give is for your parents to contact the Equity Release Council (an independent body) who have a list of appropriately qualified advisers for you to speak to. You can search for an adviser based on location and find someone who is close by.
Alternatively, if they would rather not look at equity release, they could look at a RIO (retirement interest-only) mortgage. This will have monthly repayments, but they are usually smaller than a standard repayment mortgage.
I would recommend they speak to a mortgage broker who can talk them through their options to decide which route is best for their needs.
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Question
Redundancy threat and remortgage
I am due to remortgage in November but my job situation is looking very uncertain at the moment. My employers have announced there will be redundancies and are currently giving people the chance to take voluntary redundancy. It’s all quite unnerving.
My question is what will happen to my remortgage if I am made redundant? I currently have a good chunk of savings in place to cover my repayments for six months at least. I will also be entitled to redundancy pay so I am able to repay for the time being. But will this impact my chances of getting a new deal? Would I be better off sticking to the lender’s standard rate?
Answer
I am so sorry to hear this – you must be incredibly worried about the coming months. If you are not working, you will struggle to get a remortgage with a new provider.
However, the good news is that your current lender will have a range of products that you can switch to without any underwriting. So you will be able to access these, even if you are made redundant.
This process is called a product transfer, and this option will inevitably be cheaper than going onto the standard variable rate. I wish you my best for the next few months.
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Question
Self-employed mortgage options during Covid
Do you know if there are any lenders willing to offer mortgages to the self-employed? My partner and I are first-time buyers and we are looking at properties but have heard we might struggle to get a mortgage because I am self-employed.
Is there anything we can do to improve our prospects? My partner has a full-time job in engineering and earns £45k but my income is slightly more erratic as I am a make-up artist and have only recently returned to work because of Covid. Any help would be great!
Answer
There are plenty of lenders who are happy to lend to self-employed applicants at the moment, but there will be scrutiny around your income to ensure that you are now back to work and earning income comparable to that which you earned pre-lockdown.
The lenders will tend to ascertain your current income levels by looking at your bank statements. So I think there is a light at the end of the tunnel, but would suggest you speak to a mortgage broker (who understands the current lending criteria of multiple lenders) so they can let you know where you stand.
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Question
Payment holiday ending – what do I do now?
I am the sole bread-winner for my family- I have a wife and two children. I have been on furlough – on and off –during the last six months and have struggled with mortgage repayments.
I am returning to work but my employer has reduced our hours and pay by 25% and therefore I am worried I will still be unable to afford the mortgage plus bills etc when the mortgage holiday period ends in October.
Do you know my best course of action? Can my lender offer me any further support?
Answer
I am sorry to hear that you are going through such an uncertain and challenging period of time.
The best advice I can give you is to speak immediately to your lender. They will be able to help you run through options and how you may be able to structure your mortgage payments to ensure that you can keep on top of things.
Lenders are under obligation to be sympathetic and support you as far as is practical, so I hope that you will be able to find a workable solution with them.
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