Lifetime mortgage

puzzledbiddy

recently divorced, all finances sorted except house sale. 63 years old on £18 annual income from pensions. Need to downsize. Don't have the money to buy out my ex. From anticipated sale price + my savings, am looking at a lifetime interest only mortgage of around £50k to enable me to buy something smaller. Should I seek advice from a mortgage broker now, although I'm not in a position to apply for a mortgage, or better to wait for the house to be sold.

Wh05apk

I would suggest speaking to someone now, so you know what to expect, and can start setting your expectations to something realistic.

You will need to find a specialist broker, as few brokers are qualified to advise on lifetime mortgages.

Conrad

You wont find a lifetime interest only mortgage. All mortgages now are known as regulated mortgage contracts and as such lenders have a maximum age limit. See further down though about (LIFETIME EQUITY RELEASE, THAT'S PROBABLY WHAT YOU WANT);

A number of factors re traditional mortgages;

1) Your age will be an issue and thus impact the max term allowed
2) Likely sustainability of income is an issue. A steeple jack claiming they can work over 65 would be a non starter as a whimsical example.

3) You can rely on pension income if this is sufficient to support the mortgage above a certain age
4) If you claim you can work above say 65, lenders will often want written proof from your employer

5) Interest only is doable but not easy to bring about. As a general rule lenders want a specific and robust repayment plan.

These and other issues make your a complex case, so only choose a very experienced broker or you will come unstuck.

LIFETIME EQUITY RELEASE;

I think this is perhaps what you have in mind.

You may want to consider an equity release style plan which is available on a lifetime basis and interest only, but the downside is the rates are high ( 6 or 7%) even though no actual repayments are made during your life. These are offered by brokers with permissions to deal in these.

holly_hobby

There is a residential mge provider discussed in a previous thread, whom don't have a published max age and offer I/O, but obv any advance is limited to and based on a suitable affordability assessment of your annual income.

Moving to lifetime equity release mge - you are old enough for a lifetime mge, but a little too young for a home reversion plan.

As already touched on, with such products, income is irrelevant (interest is rolled up onto the debt), and there is no max redemption age - the mge repaid upon death or entry into long term care.

HAVING SAID THAT ... there is a provider whom permit the mortgagor to make monthly interest repayments, to effectively ring fence the debt and prevent erosion of free equity in the property over the term of the arrangement (similar to the old Halifax retirement plan product) - this option may be important to you if you wish to bequeath as much of your estate as possible to nominated 3rd parties. If you don't require the option to make any repayments, you may wish to also ensure that the chosen provider also provides a no negative equity gte - which will provide protection against your residual estate being exposed to settlement of any neg equity balance.

The % released (which can also apply to a property pch), will be respective of your age (the younger you are the lower the permitted %) and property value.

Advice in this area, must be sought from a qualifed lifetime mge/equity release advisor, try your yellow pages, and you may want to take a look at the SOLLA website - http://www.societyoflaterlifeadvisers.co.uk/, whom will give you a guide to advanced advisers in your region. SOLLA membership only attained by advisors whom in addition to suitable qualifications, have voluntarily been further and independently assessed, as to their proven proficiency and application of knowledge in this area of niche advice.

Equity Release Council (formerly SHIP - safe home income plan) - http://www.equityreleasecouncil.com/home/ are a voluntary membership of providers whom all provide a no neg equity gte, and adhere to a strict code of conduct - lots of guidance on there ... as well as Age Concern of course - http://www.ageuk.org.uk/products/products/financial-products--services/equity-release/?tab=equity%20release%20glossary .

The above will all provide valuable assistance and guidance ... but any qs you have just give me a shout, as I am a qualified Longterm care & EQR consultant (although I don't currently advise, my role instead being that of assessing and auditing EQR advisors).

Hope this helps

Holly

puzzledbiddy

Thanks for the informative advice so far, will check out websites and find an appropriate mortgage broker, will keep you posted.