Life time mortgage?

Linton

Situation: We are retired, no debts, own our current house and have more than enough investments and pensions to guarantee that we can maintain our standard of living for the rest of our days. We have no dependents nor anyone else with an expectation of receiving a large inheritance.

Objective: To depart this earth with minimum assets - just enough to guarantee very good care should that be necessary.

Problem: We would like to spend our very old age in the most comfortable bungalow in the most attractive part of the country that we can afford. However we dont want to die owning a valuable house, so what I am after is maximum funding from an insurance company on the basis they can take the whole property when we die.

Question: Is this possible? - it doesnt seem to be the normal form of equity release/lifetime mortgage. What sort of % contribution to the purchase cost can we hope for, assuming we were to buy our dream bungalow when we were 70?

Mrs_Z

Sorry, can't help with your quesiton as such, but could not just rent your dream bungalow?

Linton

Mrs_Z wrote: »

Sorry, can't help with your quesiton as such, but could not just rent your dream bungalow?

We wouldnt want to move again - will anyone give us a 30+ year guaranteed rental?

betmunch

I think you need to speak to a specialist Equity Release Mortgage Broker. Once they understand your needs exactly they may be able to help you achieve you objective.

Have you found said bungalow?

Linton

betmunch wrote: »

I think you need to speak to a specialist Equity Release Mortgage Broker. Once they understand your needs exactly they may be able to help you achieve you objective.

Have you found said bungalow?

Not looking yet - quite a few years to go. I would just like to get clear in my mind what our long term plans should be.

From your response it seems it could be difficult.

betmunch

Equity Release is has the highest regulation of all the different mortgages you can have, you even need special qualifications to do it.

From my experience the advisor has to practically try and sell you any and every other solution first and you have to say no I understand and definately want Equity release before they can write up an application for you!

However, if you have a good few years to go, who knows what will be available in the future, I would worry about it nearer the time

Mrs_Z

Linton wrote: »

We wouldnt want to move again - will anyone give us a 30+ year guaranteed rental?

Well, I'm not sure whether it's wise to be doing a 30 year plan, a lots can change in that time; health and requirements...

There are lots of companies that exclusively deal with over 55+ rental market with security of tenancy, although the properties tend to be flats rather than bungalows. Still, it's worth looking into.

HappyMJ

The housing assocition in my area does shared ownership for older people. They are good for you as you can buy half of the property with cash then as you have no money left housing benefit pays the rent on the other half. You also have a secure tenancy.

holly_hobby

There a number of posts on lifetime mortgages if you have a hunt through (I try to contribute to those I spot as a qualified equity release and long term care adviser & auditor) - they are traditionally used to release equity on a currently owned property, attractive to asset rich cash poor individuals, and repayable on entry into long term care or death.

The % of mortgage is restricted to the age - the younger you are the less the % - I dont' believe from your post this is suitable to your requirements.

You are in essence looking for an free age interest only mortgage - whereby you will just pay the interest on the loan until redemption or death. YBS used to provide such a solution, which is sadly no longer offered - indeed you will find that all lenders will have an upper age limit by which redemption must be made - so its a catch 22 I'm afraid.

Renting is an issue re security as you have stated, with only social housing providers being in a position to offer life time tenancy agreements.

So bearing that, and everything else in mind, I am inclinded to agree re the shared ownership option. Funnily enough my parents in law are in the process of buying a shared ownship, as they have downgraded, and dont' want to tie all their capital up in the new home, wishing to travel and generally enjoy it .. and quite right too !!

Anyway, hope the comments are of some help.

Holly

Linton

Thanks for the comments, but I dont think they do shared ownership on luxury bungalows with a sea view. I am wanting to upgrade, not downgrade, with the temporary assistance of a lender.

So for example if I have £400K available, would someone lend me £100K for the rest of my days in the knowledge that they will get my £500K bungalow when I pop my clogs?

holly_hobby

You want to put 400k in and borrow 100k .... whilst your lead post states you "want to depart this earth" with as minimum assets as possible, so this rather defeats the object, where the suggested shared ownership by HappyMJ rather solves it.

It shoudl be recognised, that shared ownership arrangements are also offered by builders, as well as housing associations of course, and are not only offered on low end of the market properties.

Looking at the "mortgage" arrangement at the buying stage, you are seeking, the max age is now around 85 for the end of a traditional mortgage, so you are looking a private investor arrangement or ... if you have the 500k you could buy for cash, and then effect a lifetime mortgage arrangement to release the 100k you desire - still getting what you want albeit the long way round.

Any equity release provider you seek for a lifetime equity release mortgage should be a member of SHIP ( http://www.ship-ltd.org/), and any adviser duly authorised to give equity release advice try Age Concern - http://www.ageuk.org.uk/ for a list of local advisers, and SOLLA for a list of brokers by area, if you wish them to have been independently assessed in their role http://www.societyoflaterlifeadvisers.co.uk/ .

I can't think of any other solution than those offered here .. so I wish you well.

Holly