We recently concluded a challenging and interesting mortgage solution for a 90-year old retiree. How does he borrow when he is not working anymore and of a very senior age?
Mr David Chan (not his real name) reached out to us with an enquiry on cash out on his residential private property. For readers who are new to cash out, it means borrowing the equity available in the property. Equity refers to the difference between valuation and loan amount and CPF used towards it. Cash out is commonly known as term or equity loan.
After a detailed conversation, we learnt that he is 90 years old!
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Residential private property
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Fully paid or unencumbered
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Owned by Mr Chan and his wife
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Both are retirees and of sound mind
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He is 90 years old
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Seek a cash out loan for investments
Cash out solution for retiree
We immediately looked at lending policies of banks and MAS. Which policy is available, that is kind to the wishes of a 90-year old home owner? We worked on this case using the 50% LTV exemption policy for mortgage equity withdrawal.
He have successfully obtained the loan approval within 1 week and the cash out monies were disbursed to the borrower within 4 weeks.
The solution we implemented for him was:
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Validated the home owners are of sound mind, to avoid any potential dispute
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Loan is borrowed by a younger borrower with income who is related to him, over a period of 30 years
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Market mortgage rates with no mark up
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Standard bank terms and conditions with no additional restriction or limitation
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Legal fee subsidy
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No property stamp duty payable
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Loan approved in 1 week
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Loan disbursed in 4 weeks
In case you are wondering after reading the above, the loan structure was Mr Chan and his wife remains as home owners and his relative as the sole borrower with no interest to the subject property.
The approach we took is applicable to residential private property that is fully paid/ unencumbered. This is one of the few solutions we have. If your situation is similar, contact us with your requirements.
