Lifetime Mortgage

Onlooker

A side issue to the Equity Release market must be the depletion of gifting to charities by people whose estates have diminished a great deal because of their involvement in the Lifetime Mortgage market place,it must be millions of pounds.Esther Rantzens charity is one prime example of reliance of gifting to survive.One person has kindly offered to leave them £50,000 in her will .Wonderful but as stated many others will have to reduce their proportion or have not enough to give.
Maybe as one provider has promised the whole industry should donate an annual amount from their profits to make up for this decline.Consider

Onlooker

Well advertised in the newspapers that mny houeholders have opted to give up a large part of their holding in their paid up property and thereby diminishing their estate in future years as well as the

inheritance to their families
The effect of raising £78,000 will have long term consequences on their financial futures.
e.g If even after just 1 year at say 5% interest they decide against continueing their exit bill will be £101,400 because it will include an early exit penalty of 25% on all borrowings.Even so if their involvement continues for 10 years they will owe £127,053,or 15 years £162,156 or 20 years 206,957 all due the compounding interest being charged.Consider

Onlooker

With regard to the effect of rolled up,added on or its real name Compounding Interest the problem is that it is difficult to understand by many people and thereby lead some into the tangle of a Lifetime Mortgage.
For example on a £78,000 borrowing 1st.year interest charged at say 5% would be £3900.00, year 10 would be £6050.16,year 15 would be £7721.73 year 20 would be £9855.11.
As shown in previous examples almost £130,000.00 would be added to your borrowings and will have a great effect on the residue of your estate.Consider

Onlooker

It appears that some people are mixing up the 7 year rule on Inheritance Tax (i.e.if you give assets away anytime before it can be taken into account for tax purposes etc)with Deliberate Deptrivation of Assets.
There is no time limit on these actions.Local authorities are able to contest in court any case they judge to be guilty of same .Unfortunately true but can lead to long legal arguments to find one way or the other.
Consider

Onlooker

With regard to the Deliberate Depletion of Assets debate we have found a website available to anyone who is also baffled with regard to this issue.If you are able look to April King Legal & Property for indepth seemingly unbiased opinion on this subject and others closely related to the Lifetime Mortgage market.
The main problem is that those who do not have the facilities or know how to look up and understand are those who will finish up in a financial position that they did not require.Consider

Thrugelmir

Onlooker wrote: »

It appears that some people are mixing up the 7 year rule on Inheritance Tax (i.e.if you give assets away anytime before it can be taken into account for tax purposes etc)with Deliberate Deptrivation of Assets.
There is no time limit on these actions.Local authorities are able to contest in court any case they judge to be guilty of same .Unfortunately true but can lead to long legal arguments to find one way or the other.
Consider

Nothing new. Has been the case for many years.

Onlooker

The latest advertisement regarding Equity Release and Lifetime Mortgages states that you will be baffled by its complexity then states it is as simple ABC once their salesman explains all .
This will be one of the most difficult decisions to make and will affect your financial future for your lifetime.
A Always request 5 year forward statements with regard to your ever rising debt in the future.
B Baffled is an understatement when you will be faced 40 plus pages of documentation.
C Consider outsider advice from at least your family and/or contributors who have no financial
gain to make in your final,and it can be final,decision.

robatwork

What's going on with this thread? It was closed 2 days ago, now posts seem to have been removed (mine certainly), it's less coherent than previously, and now it's open again.

Onlooker

Many of the financial pages seem to be discussing the fact that a recession in property values could again be on the way.
If it became the case then anybody with a Lifetime Mortgage would be hit.The loans taken out would still mount up at the same rate but the value in their property would reduce.
This would cause a lessening in the gap of what you own and what you owe giving a smaller amount in anyones equity.
The financial institutions have already factored in cover should recession occur but borrowers will have little recourse.Consider

Onlooker

One of the half page advertisements with regard anyone taking out a Lifetime Mortgage said you will still be allowed to live in your home,which seems condesending about the same as the alternative that you could always get a part-time job.
Now they are quoting the saints in heaven as to why anyone who has found themselves trapped in a lifetime of mounting debt should not be angry with anyone but themselves.
The problem with the lady contributor is along with most of the equity release industry they have not used their own product thereby having no reason to get angry at all.Consider