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  • FIRST POST
    • Onlooker
    • By Onlooker 23rd Jun 17, 3:15 PM
    • 12Posts
    • 5Thanks
    Onlooker
    Lifetime Mortgage
    • #1
    • 23rd Jun 17, 3:15 PM
    Lifetime Mortgage 23rd Jun 17 at 3:15 PM
    We raised 45,000 with one of the leading providers 8 years ago but somehow failed to take notice of the future consequences of our actions on our property and the negative effect on our estate and family.
    After 8 years our initial loans increased due to added interesr to 65,580 .we have now been provided with figues
    that show after another 7 years our debt against our property will be 100,247 pounds and continue to increase
    at 5 to 6 thousnd pounds annually until it ends.
    We would advise famillies to obtain future estimates on their future consequences.
Page 2
    • Downsizer
    • By Downsizer 16th Jul 17, 8:45 PM
    • 9 Posts
    • 0 Thanks
    Downsizer
    Lifetime Mortgage
    BEWARE OF FALSE PROPHETS

    Matthew 7:15 KJV
    • robatwork
    • By robatwork 17th Jul 17, 6:56 PM
    • 4,011 Posts
    • 4,352 Thanks
    robatwork
    BEWARE OF FALSE PROPHETSPROFITS

    Matthew 7:15 KJV
    Originally posted by Downsizer
    Corrected that for you.
    • Onlooker
    • By Onlooker 27th Jul 17, 11:09 AM
    • 12 Posts
    • 5 Thanks
    Onlooker
    Lifetime Mortgage
    The couple who raised 20,00 with a Lifetime Mortgage as advertised in the press
    seem to have performed an excellent job with that loan.How?
    Initial payment to them after set-up charges say 18000,less say a necessary payment
    on their existing property,say 3000?A kitchen extention?7000? Car upgrade 2000?
    Holiday 2000?4000 residue maybe.It appears that these people have always been
    compedent with finance so why have they not realised the pitfalls in their future of
    taking equity in their property
    • Onlooker
    • By Onlooker 2nd Aug 17, 4:35 PM
    • 12 Posts
    • 5 Thanks
    Onlooker
    Lifetime Mortgage
    Sorry the loan taken out should have read 20,000 otherwise it would have been a miracle.Talking of
    figures if 50 householders decided not to raise that 20,000 they would save themselves 1million now
    and probably another million later in their lifetime.Consider.
    • AnotherJoe
    • By AnotherJoe 2nd Aug 17, 7:18 PM
    • 7,671 Posts
    • 8,280 Thanks
    AnotherJoe
    The couple who raised 20,00 with a Lifetime Mortgage as advertised in the press
    seem to have performed an excellent job with that loan.How?
    Initial payment to them after set-up charges say 18000,less say a necessary payment
    on their existing property,say 3000?A kitchen extention?7000? Car upgrade 2000?
    Holiday 2000?4000 residue maybe.It appears that these people have always been
    compedent with finance so why have they not realised the pitfalls in their future of
    taking equity in their property
    Originally posted by Onlooker
    Perhaps they had the wit to pay off the interest to stop it accumulating?
    Maybe it was their only option and they were content to have the money now rather than leave it to well off children ?
    Maybe they've got no one to leave the equity to so it's worthless to them?
    Maybe it was preferable to downsizing ?
    Maybe they aren't bitter and twisted because they didn't expect someone to plant a magic money tree in their garden ?
    • haras_nosirrah
    • By haras_nosirrah 3rd Aug 17, 8:11 AM
    • 1,322 Posts
    • 2,467 Thanks
    haras_nosirrah
    what did you need the 45k for op?

    did you think the deal was you can take 45k out of your home, pay nothing for an indeterminate period of time and they take the 45k back when you die or did you think there would be interest charged but you had no idea how much - in which case why didn't you ask?

    if the 45k was for something you desperately needed, house repairs, a new car etc and you could not afford the repayments and it was either do this or have a dilapidated property or you would be isolated as there are no busses where you live then it seems the 45k lifetime mortgage was a good idea as you would not have got a traditional mortgage if you do not have the income required to repay it.

    if you spent it on holidays, frivolity, tat and basically wasted it then yes it was not the smartest move but at the end of the day it is your house and your money. If the kids want to protect their inheritance could they pay the interest on the mortgage to stop the debt increasing further? Explain to them you can't afford to pay the interest and it is their inheritance going to the bank and give them the choice - they can pay the interest now and keep the capital or they can leave it as it is
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • Downsizer
    • By Downsizer 8th Aug 17, 12:40 PM
    • 9 Posts
    • 0 Thanks
    Downsizer
    Lifetime Mortgage
    Donsizing v Lifetime Mortgage. The average amount homeowners ar looking to
    raise from their properties is at the moment 80000 .One choice is Euity Relrase
    80000 raised at say 4.9% compounding interest would in 5years leave someone
    owing over 101,000 .In another 5 years this will be over 129,000 and raising
    year on year for your lifetime.Early repayment can be made but will be charged
    up to 25% of the original loan on top of interest accrued.
    Downsizing is different in that if you raise monies that way the transations will
    be done in months and no one will be committed to years of rising debts.
    Of course there will be legal charges on both choises to be taken into acconnt.
    With downsizing and one-time stamp duty maybe more but paid up immediately
    With a Lifetime Mortgage it is deducted from your lump sum but left in your
    gross borrowings ,charged interest on thus doubling or even trebling these legal
    charges for the lifetime of said mortgage.
    An emotional choice either way .Consider deeply,ask the family get advice.
    We did
    • Ganga
    • By Ganga 8th Aug 17, 7:32 PM
    • 864 Posts
    • 426 Thanks
    Ganga
    There is an advert on the tv at the moment ( on nearly every day ) where the couple take an equity release morgage " to give them some money for home improvements and to PAY OFF THE MORGAGE " unbelievable but some people must use it.
    ITS NOT EASY TO GET EVERYTHING WRONG ,I HAVE TO WORK HARD TO DO IT!
    • Onlooker
    • By Onlooker 11th Aug 17, 3:44 PM
    • 12 Posts
    • 5 Thanks
    Onlooker
    Lifetime Mortgage
    You cannot raise a Lifetime Mortgage without paying off your existing mortgage and then taking on a
    legal charge against your property for any monies that you borrow to pay what you owe plus any new borrowings you make.
    • Downsizer
    • By Downsizer 18th Aug 17, 11:44 PM
    • 9 Posts
    • 0 Thanks
    Downsizer
    One of the couples who raised a 20,000 Lifetime Mortgage state that they will not be worried
    by debts in their future.They may be debt-free for the moment but will receive annual statements
    proving othewise and rising year by yearf for the length of their lifetime.
    On that point another advert states that you can remain in your home as long as you choose.
    To choose anything other than seeing the Lifetime Mortgage to its conclusion and decide
    to return to total ownership of your home will entail repayment of the original loan plus
    compound interest plus up to 25% of original loan.Consider..
    • Onlooker
    • By Onlooker 1st Sep 17, 1:31 PM
    • 12 Posts
    • 5 Thanks
    Onlooker
    Lifetime Mortgage
    We have just received our annual statement showing as usual a four figure interest addition to our
    Lifetime Mortgage.As usual we question the fact that we cannot switch to a lower interest rate,of which there are aplenty even with our own proidvers,without paying an early repayment charge which can come to 26% of any original loan.Even swiching at this cost will take 5/6 years before any benefit of taking this action.
    MSE is full of switching solutions for customers financial benefit but not the Equity Release market.
    The above conditions will apply immediately anyone signs up to a Litetime Mortgage.Consider
    • clairebeth
    • By clairebeth 2nd Sep 17, 2:49 PM
    • 140 Posts
    • 52 Thanks
    clairebeth
    Ok, so you need to pay a £12,000 fee to get rid and remortgage. How much interest are you currently accumulating? What rate? What is current balance? Perhaps you need to admit you made a mistake, cut your losses, pay the £12,000 and remortgage to a more sensible situation? This is something you could maybe speak to your children about, seeing as it's presumably their inheritance that is dwindling away in interest every year. They may choose to pay it off for you now, to stop any more money going down the toilet?
    • debbre41
    • By debbre41 24th Sep 17, 8:55 AM
    • 1 Posts
    • 0 Thanks
    debbre41
    Life time mortgage /equity release
    Hi all. My parents are in the same position
    There is now a first charge on the house with the lending company.
    My question is : how can we pay it off? Can I buy part of the house so that they can pay it off?
    Does anyone have any serious suggestions?
    • ViolaLass
    • By ViolaLass 24th Sep 17, 9:02 AM
    • 5,137 Posts
    • 7,132 Thanks
    ViolaLass
    Of course we blame ourselves.Insight is a great thing but been faced with over 40 pages of litrature we are having to live with it.We certainly now see the intricaces of the business.To switch will in our case cost 25% of the loan,i.e.11,250pounds and at whatever reduced rate would take 6/7 years to recoup.Not very viable.Compounding Interest is added to your loan of course but the effect and the speed at which it will diminish your estate eccesive to say the least.To be able to afford to pay off the interest annually would be nice but not possible in our case.The only saviour can be house price inflation but no-one will guarantee that..As we have stated people should aquire 10/15/or 25 year forecast against the release that they are considering plus interest rolled up over the years ahead
    Originally posted by Onlooker
    Did you need the £45k? (I assume you)

    Then what else could you have done? Would you not be in a worse position if you had not had it?
    • mummytofour
    • By mummytofour 24th Sep 17, 8:32 PM
    • 2,612 Posts
    • 1,195 Thanks
    mummytofour
    Of course we blame ourselves.Insight is a great thing but been faced with over 40 pages of litrature we are having to live with it.We certainly now see the intricaces of the business.To switch will in our case cost 25% of the loan,i.e.11,250pounds and at whatever reduced rate would take 6/7 years to recoup.Not very viable.Compounding Interest is added to your loan of course but the effect and the speed at which it will diminish your estate eccesive to say the least.To be able to afford to pay off the interest annually would be nice but not possible in our case.The only saviour can be house price inflation but no-one will guarantee that..As we have stated people should aquire 10/15/or 25 year forecast against the release that they are considering plus interest rolled up over the years ahead
    Originally posted by Onlooker
    But the thing is, you won't need the house one day and what you leave and don't leave your kids is your choice. I know you feel bad but it's your house and it's up to you if you took out a lifetime mortgage. For some people this is the only way they can afford repairs, holidays etc and to be honest, enjoy your life xx
    Debt free and plan on staying that way!!!!
    • Worried2
    • By Worried2 8th Nov 17, 1:52 PM
    • 2 Posts
    • 0 Thanks
    Worried2
    Switching
    The MSE site provides so many sites giving information as where to seek savings on Energy,Car Insurance,Home insurance,Bank accounts etc.Some providers even
    rewarding customers for joining them.
    The Equity Release market does not give this service for free.A Lifetime Mortgage cannot be switched to obtain a lower rate of compounding interest with another provider or even your own provider.This is because one of the terms signed for is that you would be liable ,on top of any monies owed ,for an early repayment charge of approx. 25% of your initial borrowings.
    This charge will apply at any time..Why is switching not free?
    • Downsizer
    • By Downsizer 16th Nov 17, 9:34 PM
    • 9 Posts
    • 0 Thanks
    Downsizer
    Downsizing
    A recent newspaper article showed Downsizing as an option of raising capital from your property.Somebody sells their property for 310,000 and downsizes to a smaller home costing 197,000 Taking into account selling ,buying and other fees they were left with a residue,tax free,of 100013. to spend as they chose.
    Another well advertised option is a Lifetime Mortgage.Using the same figures and release 100,000 yo u will be charged a compounding interest rate of around 6%
    This will add 79000 to your debt in 10 years from now,114000 in 13 years and in 20 years the amount due will total 320,000.
    We opted for the first option after assessing the costings.
    • Downsizer
    • By Downsizer 30th Nov 17, 4:24 PM
    • 9 Posts
    • 0 Thanks
    Downsizer
    Sell a bedroom.That is my look at Downsizing.4bed down to 3 or 3bed down to 2 could in some households be an option which will provide a 5 or 6 figure lump cash reserve not subject interest charges.You will even gain some monies in interest on your cash in hand. Not summiting to legal charges which would ensure you will never own 100% of your home
    The figures quoted also came with a warning that they could come accompanied with the danger of a house price crash but does not mention the fact of the losses that would be made on Lifetime Mortgagees or even the fact that if the aforesaid did happen every household would affected.
    Lets hope not.
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