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Equity Release / Lifetime Mortgage
WillyWonga
Posts: 324 Forumite
My Dad owes £25k on an interest only mortgage (pays £55 mth) due to be paid in about 2 years, he is 74 years old. The house is valued at around £240k. Basic state pension as only income.
Nationwide have upped the age so could possibly continue as he is for next 10 years but looking at possibility of releasing some cash to split between children so he can see the benefits.
He is looking at £100k, £25k to pay off existing mortgage and £75k to split between 3 children. Looking at figures this would only be possible through LT Mortgage/Equity Release. But reading the horror stories of compounded interest between the 3 of us we would pay the interest part to keep the amount owed at £100k.
Many of the providers wont give too much details away without sending out an advisor to your home to talk through it.
From any advisors on here do you know what sort of interest rate these providers would roughly charge?
Many thanks in advance.
Nationwide have upped the age so could possibly continue as he is for next 10 years but looking at possibility of releasing some cash to split between children so he can see the benefits.
He is looking at £100k, £25k to pay off existing mortgage and £75k to split between 3 children. Looking at figures this would only be possible through LT Mortgage/Equity Release. But reading the horror stories of compounded interest between the 3 of us we would pay the interest part to keep the amount owed at £100k.
Many of the providers wont give too much details away without sending out an advisor to your home to talk through it.
From any advisors on here do you know what sort of interest rate these providers would roughly charge?
Many thanks in advance.
0
Comments
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Would they allow an interest only Lifetime mortgage if the payment for the interest only part is coming from a different source because my dad's income would not pass the test?0
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Is downsizing an option? Extending the mortgage to 85 doesn't solve the problem. What if he lives longer.0
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I dont want to extend to 85 thats why I want to look at possibilites for him now. Downsizing is not an option as a house he has lived in for over 50 years. By taking £100k out of the house it will pay Nationwide off and provide him the £75k he wants to split. If the 3 of us keep up the interest payments then when the time comes and the house is sold we only owe the £100k.0
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I'm not a mortgage expert, but sounds a bit iffy to me...
I might have got this wrong but he'd take 100k out, give you each 25k, you'd then pay the interest and end up owing 100k? Is that right? If so, what's the point since you'd end up paying interest and still owing the same amount he's taken out?
Surely that's a lot worse than your dad paying it off and the house coming to the 3 of you in the future debt free?0
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