Posted on 23 July 2013 by Richard
I am 62 and have 3 years to retirement. My retired partner and I jointly own two properties outright with a combined value of £350K. One is let. We wish to buy a retirement home now and would need to borrow around £120K for 3 years until we can either dispose of our current property or use pension lump sums to repay. Can you advise us on our prospects for obtaining interest-only loans and the likely interest rates?
The simplest way to raise the £120,000 would be to do two Buy To Let / Let to Buy mortgages on the unencumbered properties that you own, and then pay cash for the retirement home. Typically on Buy To Let / Let To Buy you can capital raise upto 75% of the property value, mainly subject to the rental income likely to be achieved.
If you are propsing to buy a specialist retirement property, then these are not easy to raise a mortgage on, hence you may find it much easier to look at Buy To Let on the other two properties.
The availability of interest only mortgages on residential property isn't as wide ranging as it used to be, however they are still available depending on your overall financial position.
I'd suggest it's well worth having a discussion with one of our consultants, to see which option will work out best for you. If you'd like to do so, please let me know and I'll arrange for one of them to contact you.
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