A 102-year-old UK man has secured a £200,000 interest-only mortgage which will cost him £958 a month until he makes the final payment at 127, Ananova reports. The East Sussex old timer, who intends to use the cash to move into the buy-to-let market, is the oldest person in Britain to be granted a new mortgage. Jonathan Moore, …
Responsibile lending, what's that?
They truly will give credit to anyone these days.... never mind working out how exactly this guy is going to pay for it between tennats, during renovations, etc.
And you thought pushing teens credit cards was bad... this guy could loose it all, and he cant work for food if it all dont work out.
I smell a Misselling lawsuit five years down the track.
Very smelly indeed
I smell decomposition for that guy in five years down the track!
What are the banks thinking lending a 102 year old, already on 'borrowed' time, 200K?!
The truely terrible thing I would suppose is when this newly financed property developer shifts off this moral coil it'll be his nearest and dearest losing out as most of his assets will be seized by the bank to cover the cost of the mortgage!
Well Done Old Boy
You can't take it with you when you go so ...
..Go owing a fortune.
The lender will be able to foreclose and make a profit too.
Hmmm, what would he do with the profits from his business anyway ?
Retire in his OLD age ?
Where's the problem?
What's the issue? The mortgage is going for a rental property. Income will be provided by the rent (which should be at least 1.25 times the mortgage payments to cover void periods). If the mortgage is unsustainable, the rental property can be sold in order to redeem the mortgage. It doesn't affect his own property.
The issue would be if there was a property crash, and the rental property was left with negative equity. However, that is an issue with the buy to let market as a whole. Assuming property continues with its mad growth, it is more likely that heirs are left with an asset than a debt.
Revokable Living Trust
If he's smart he'll put his heirs on the deed as part of the Revokable Living Trust. Don't know how that would work in the UK but the whole idea is that he would have the heirs as co-owners of his assets including this rental property. Upon his death they would then be the owners of the property and owe the mortgage amount, which, if this is a good investment, would be amply covered by the cost of the rental fees charged to the renters. It could be a fantastic supplemental income for him in his last years and leave a tidy monthly amount to his heirs after his death as well. Yes there will be a debt involved, but the overall effect is monthly profit and growing equity. I approve.