lifetime mortgage

slugger230

Hello there,
i want to know if it is possible to do a lifetime mortgage or similar if there is a mortgage on the property?

thanks

dunstonh

As long as the mortgage is cleared at the time the lifetime mortgage is taken then yes.

slugger230

do you mean it would be cleared by the lifetime mortgage?

slugger230

the property is worth 260000-280000 and there is a mortgage balance of 120000 and a secured loan of about 350000. how would this work?

TrickyDicky101

It wouldn't if you intend the lifetime mortgage to clear the balance of your current secured debt - you are highly unlikely to get a lifetime mortgage for 60% of the property value. Also depends on your age/spouse's age too.

dunstonh

Have you got the number of zeros right here as you are putting the borrowing at a greater amount them the property value?

do you mean it would be cleared by the lifetime mortgage?

Yes. it can be done that way subject to borrowing limits.

holly_hobby

The lifetime mortgage would redeem/replace the existing mge.

There are various ways to achieve a lifetime mge, if you are happy to pay an interest only mge payment each month, and have income during retirement to cover the mge repayments/loan reqd - there may be (Yorkshire BS was one) high street lenders who do not have an upper age limit - as long as your income during your retirement yrs is proven and guaranteed for the duration of the chosen term. You would take lifecover for the total borrowing, so that upon your death the mge is repaid in full, and remains intact for the benefit of your remaining spouse, or estate.

If you don't want to make any monthly repayments, then a Home Reversion Scheme or a True Lifetime mortgage may be more appropriate. In the case of Lifetime Mge, the lender does not require a monthly repayment to be made, but the interest charged on the loan is rolled up and added to the mge balance. The lot being payable upon sale of the property, death or going into long term care. They have a lower age limit, and of course product fees to pay. You need to make sure that the product/lender has a "no negative equity" clause.

I really would suggest that you seek professional qualified advice on this - the adviser being a qualified long term care/lifetime mge adviser, to ensure that they have the competence and knowledge on assessing how any equity release you achieve may effect any means tested benefits you receive, including assistance towards any future need of Long Term Care or Nursing Home fees .... its a complex area and full of hazads to those who are unqualified or unfamiliar with this area of advice.

Good luck

Holly

pvt

slugger230 wrote: »

the property is worth 260000-280000 and there is a mortgage balance of 120000 and a secured loan of about 350000. how would this work?

Badly!

Puzzled how you come to have £470k of mortgages secured against a property worth under £300k??

Are all those numbers correct?

pvt

slugger230

ok simple typo, 35k secured loan not 350k.

slugger230

all i was hoping to find out was if it was possible to do a lifetime mortgage with no payments, even though there was existing borrowing. from what i gather the usual amount based on the 260k figure would be about 63k but out of this the existing mortgage would need to be paid? my problem is this does not cover the outstanding borrowing so how would it work?

i hope there is no typos for the pedantics to comment on!

dunstonh

i hope there is no typos for the pedantics to comment on!

Hold on. Getting the amount you borrowed wrong is not a pedantic comment. Its vital bit of information. It can change the circumstances totally.

If you are going to be like that then I will bail out at this point. However, before I go, I will just say that lifetime mortgages are for the over 60s with a few going to 55 as their lowest point. If you are under 55 then its a no go anyway.