Irish Times: Questions & Answers April 14th

The Irish Times mentioned us in their weekly Q&A section (below)

Can I release equity in my home under age 55?

Q Can you tell me if it’s possible to release equity in my home prior to reaching the age of 55? I own my home outright and have no family to pass it on to when I die. I bought my house last October but it needs a great deal of upgrading which I have very little prospect of being able to afford any time soon.

I’m unable to work due to a disability and my only income is via a divorce maintenance payment established many years ago, which is worth very little. I have offered the opportunity to my siblings as a potential investment for their own children but none are in a position to avail of this. I will turn 55 at the end of 2012.

Do I have to wait until then and, if so, are there pitfalls in the system?

A Your age is not going to be your main stumbling block – your lack of income is. Karl Deeter from Irish Mortgage Brokers says homeowners can release equity as long as the end date of the loan is 70 (ICS, EBS and PTsb will do to age 70), so generally a 10-15year loan would be possible but, as you have no income, that won’t work. Maintenance payments are (currently) not taken into account although some people may find that if the maintenance was particularly large or there were some other factors, such as significant money on deposit, there may be some hope, particularly if the house was owned outright.

Start Mortgages or a sub-prime lender may have backed a deal like this in the past, and Seniors Money would do a deal from age 60 – which is some time off for you. Deeter suggests you spend an hour with a financial advisor or an accountant but do the sums because the borrowing idea isn’t possible in the current climate with your income situation.

Did you rush into buying your present house last October? Why not sell up and trade down to a more manageable home in better condition that will need little upkeep as the years go on? Either an apartment (though make provision for service charges) or a small house that will suit your needs as you get older. Do you really want to get into debt at this stage of your life?

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