I sure hope that he did not have an early pre-payment penalty in England where this loan occurred.
The property investor from East Sussex has taken out an interest-only £200,000 mortgage and hopes to meet the £958 monthly repayments with income from rent as he joins a growing army of retired people hoping to cash in on buy-to-let schemes.
Most lenders set a limit at 75 years for mortgage applicants but a handful, including Woolwich, and Bristol & West, have no such restrictions. This has led to a rush of applications from older investors.
Jonathan Moore, of Mortgages for Business, an independent adviser based in Sevenoaks, Kent, told how he brokered the mortgage for the unnamed 102-year-old, one of hundreds he has arranged for pensioners. “This is a new phenomenon.Obviously there is an element of risk if property prices and rental income suddenly fall but there is no sign of that at the moment,” he said. via TimesOnline.
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Keep in mind, it is illegal to discrimate on age basis. The lender cant just say… gee, he's 102, he's not going to make it to 127! Obviously, it doesn't make sense, but if he had good credit, they had to offer a loan to him.
Wow, I’d imagine they threw that PMI in there some how.
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Why should his/her age affect whether they could get an investment loan?
If the lender wants, they can insist on a "in the event of death, we require repayment in full" clause… which might affect how much a matching life insurance policy cost, but that's very unusual in an investment loan these days. [Remember, I write from the UK.]
Normal policy is to let the estate either assume the mortgage, or sell up the property to collect. In either case, the lender gets their profit…
… and tenants don't stop paying rent, just because the original landlord has died. Hell, I know someone who has a tenant in the THIRD GENERATION on both the landlord and tenant sides!
I hope my parents are still able to make investment decisions at 102… for that matter, I hope I am