Refinance for PPOR at 61 years, Possible?

Wife & I are 61 years old.

Valuation of PPOR in Nov 2015 was $1,280k, in Hills district of Sydney, I estimate it would be around $1,400k now.
Current Mortgage is $720k LOC have had for over 10 years.
Have other Loans, cards etc of $85k. (Total debt $805k)

We work thru Family trust which last year t/o $75k
I also have PAYE work which last year was gross $65.6k
We are in good health & have no plans on retiring anytime soon.

We want to consolidate loans and build a granny flat to add income of $20kpa + for our area.
So total of around $900k. preferably LOC

Broker 1 - We are too old, only possibility was for a P & I over 13 years with ridiculous repayments.
Current Bank - We are too old to do anything, don't rock the boat, hang onto current LOC & don't give them any reason too look at us, only possibility is to sell up.

So, is that it then, head down & bum up, with no possibility of reducing outgoings or building anything worthwhile for the future.

Current situation is due to bad investment decision 10 years ago, up to 2 years ago there was a chance it could be revived, but alas dead and buried and all funds goooone.

Prior to that we had some success buying well, renovating and selling in Newcastle.
Silly me, thought we could even borrow more, as there is plenty of equity, to do that again in specific regional areas & reduce the loan with the profit from each one.....but I am too old.

Is all hope lost? or does anyone know any way that we could achieve even a small part of our goals

Thanks

 

What's your super looking like? Depending on servicing there may be options. I wouldn't give up yet.

 

SMSF went into the bad investment as well, all gone too..

 

Not impossible, just need to choose the right bank and give them the right explanation/reason for the refi.

Explain the ongoing nature of the family trust income, how you expect to work payg for quite some time. That the granny flat will also have rental income.

Some banks have a policy around age of borrower, some don't. Choice of lender is important.

 

You are not too old. It will come down to your income and your exit plan - how will you pay off the loan?

 

Some thought.

I helped people older than you get loans, broker and lender than had no problem, but was not recent.

You may have seen a 90 year old in nursing home got loans of millions recently on tv, so not impossible (although it was not legit, but the age was not the problem).

I believe they cannot discriminate against you, I know many people who lived into 90s and the ton & still better money managers than many young people.

You may be forced to pay for legal advice, where someone will tell you you have to pay the loan back and make repayments & for that valued service you will fork out a few hundred dollars.

But I do think you may get asked for a plan, or how you intend to pay the loan back etc, so if you have a viable plan and LVR is low, is no more risk than some first home owner who decides not to pay loan anymore.

If your both happy to be increasing your liability, then I would say contact a broker, do not go to the bank direct.

 

Not an easy deal to place - it's quite a large owner occ debt and their doesn't seem to be a sound exit strategy in place.

I'd hit up one of the brokers above and see if they can assist.

Cheers

Jamie

 

Lenders can and do discriminate because they could not lend money to a person who cannot pay it back so they use this as the beating stick arguing that this old person will retire x years after the loan is approved, so how will they pay it back.

Here is an excerpt from a recent email from a major lender:

 

So hard! So if you're young, you can borrow money but saving the deposit can be hard. If you're middle aged, you can borrow, but often everyday life (work, family, bills) takes precedence over building wealth. If you're older and have a job and perhaps an empty nest, lenders can be reluctant to lend to you too because you might stop working soon or you're more likely to fall off the perch more so than someone younger (to face the facts, there's obviously truth in this statement).

#lifewasntmeanttobeeasy?

 

Absolutely they can discriminate and In this situation I say that's a great thing both in the interest of the lender AND the borrower.

If someone is 61 then the banks will give them a retirement age of 75 which is pretty reasonable. So if they allow them a 30 year loan then how are they paying back the remaining 16 years if they do not have an exit strategy??
Say they have a PPOR, no investments and limited super...what's the expectation? That they spend all their pension paying down a loan?

The idea of refinancing at this age is likely to save on interest rate and extend the loan term back out but in reality if their is no exit then the goal should be not reducing payments, it should be accelerating them so long as the person is still in the workforce.

Allowing loan terms extending to when someone is 90 with no way to pay it back outside of weekly payments being made from the pension is the most non prudent lending possible.

 

If you demonstrate to the lender that by building the granny flat, you can actually pay off the total debt faster, would that help?

Eg. $120k loan for Granny Flat @ 4.5% = $5,400
Rental Return of $550 per week = $28,600
Additional Income (Before tax) of $23,200 p.a.

 

Yes, but it may still not be enough on its own. You can also say will be paying out the loan with super once I am able to access it.

 

It's illegal to discriminate based on age race religion sexual preference.
Some lender try to discriminate on age because they don't want to be on a current affair kicking pensioners out of their homes. Other lenders get an outline of the pensioners plan at application so they can give a copy to the journalist.

Having different loan terms for older borrowers is just another form of discrimination, it puts the borrower in hardship, and isn't based on the real world. In the real world at 75, after 15 years the loan amortisises, and the super and other investments increase. People don't stay in a big old house after retirement, especially not if they have a big mortgage, they downsize. Not everyone of course, some will choose to try it on and call a current affair.

There was a 730 report on bodgy brokers and older borrowers last night. Anyone catch it?

 

maybe your exit plan is to downside to a unit one day

 

Yes - was rather annoyed. There's crap people in every industry, not just broking. And borrowing money as a pensioner to lend to your son's business venture is not the wisest thing to do, especially if you can't afford to repay it if it goes bad.

I didn't see the failed businessman son on TV as a co-scapegoat, incidentally.