The question from Colin, 53.
I would like to understand the best options: how to go about helping my Mum sell her current house (approx value £500k with a £30k remaining mortgage with Halifax) and move into a retirement flat (estimated purchase price £180k). The key objectives are to be in a position to move quickly to buy a retirement flat when one comes onto the market and then how to bridge the gap until my Mum subsequently sells her house with a view to using the funds from the sale of her house to pay off the purchase cost of the retirement flat. Thank you.
Answer from Keri Carter, CFPTM Chartered MCSI, Broadway Financial Planning
Clearly, the ideal position would be to go ahead with the sale of your mother's home on the basis that a retirement flat falls available at the same time. Because of the nature of their availability, this isn't always possible. One of the options would be to consider proceeding with the sale of your mother's house on the basis that your mother could find alternative accommodation until a retirement flat becomes available, either by renting or living with other family members. In order to reduce the costs of sale, you may wish to consider some of the online selling facilities available which can offer considerable savings on the more traditional estate agency fees.
The alternative is to consider an equity release arrangement which, depending on her age, could release the necessary funds required to repay her current mortgage and proceed with the purchase of a retirement flat whilst staying in her current home. If this route is considered further, it's important to establish the costs of doing so as the redemption penalties on the eventual sale of her home could prove substantial. I would recommend using an experienced financial planner to provide the full costs and implications of entering into this arrangement. Details can be found at cisi.org/wayfinder
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Keri Carter, CFPTM Chartered MCSI, Broadway Financial Planning