Lifetime Mortgage

Harryo

I am 65 yr old, self employed and business has not been wonderful over the last few years. Although I have had adequate money to live on , my accounts do not portray a very good financial situation. My interest only mortgage is coming to an end and I will owe about £80K. I am planning to work hopefully until I am about 80 by which time I should have been able to pay off the £80K. If not, I will sell my house to do so. I do not want to sell my house now as it is kitted out for my work and I need the space. Due to my situation I have been unable to get an ordinary mortgage or a Retirement Interest Only mortgage. I thought I had found a solution to my problem with a Lifetime Mortgage but there are so many negative remarks in this Forum that I now have doubts. From reading details of so many of the Lifetime Mortgage schemes it seems there are no affordability tests, no problems with my age or self employment and no requirement to submit accounts. On that basis, with my impeccable Credit Score I would envisage I will be accepted. That to me is the biggest stumbling block I have been facing. Most of the schemes I have looked at seem to allow a 10% repayment each year without incurring any charges. Some also seem to allow monthly interest payment but I am not sure if that is in addition to the 10%. All being well, I should be able to achieve 10% and pay it all off in 15 to 18 yrs. I believe that will ensure there is no negative impact on the value of my property. If I cannot earn money to make payments I believe I do not have to make payments and therefore there would be an advantage over a conventional mortgage where the Lender could take me to task. If I did get to that situation I would anyway sell my house as soon as I could. Therefore overall I cannot see any disadvantage of a Lifetime Mortgage for me compared to a conventional mortgage other than the interest rate will be about 3.7% compared to 2.25% for the cheapest Fixed price ordinary mortgage I could find, which I cannot get anyway. I would be most grateful to have views from the members on my plans which I am yet to test the water with. I am concerned that I may have missed something which will cause me future grief. Thanks Harry.

justjohn

Is it wise to work until your 80? We don't live for ever. Surely if you can you wind down before then?

Harryo

Hi justjohn


I am lucky that I enjoy what I do for work and have done so for 49 years.


I have adequate leisure time to see family and friends and for hobies. I have holidays when I want them. I need more than those things though and I find it in my work. It keeps me going.



As for whether it is wise - I am hopefully fit and healthy, I am happy (most of the time) and I am content. I feel as though I am still 16 but undubtably do not look it. There is only one thing I am suffereing from and that is poor eye sight.

justjohn

Harryo wrote: »

Hi justjohn


I am lucky that I enjoy what I do for work and have done so for 49 years.


I have adequate leisure time to see family and friends and for hobies. I have holidays when I want them. I need more than those things though and I find it in my work. It keeps me going.



As for whether it is wise - I am hopefully fit and healthy, I am happy (most of the time) and I am content. I feel as though I am still 16 but undubtably do not look it. There is only one thing I am suffereing from and that is poor eye sight.

Sorry if my comment sounded rude. Every person is different and its good you are happy and contented.

Harryo

Not at all.


I have friends who have retired who say they dont know where they found the time to work. I also have friends who say they have had enough and cannot wait to retire.I realise I am a bit different. I do not consider my self to be a workaholic as I do like to do the other things. I do however get up each work day and look forward to what I will be doing.I have never thought about retirement or planned for it, probably on the basis that it was so far into the future. That perhaps has been a very big mistake as the future comes with a blink of the eyes.

Onlooker

An advert full of numbers i.e billions /millions of pounds will be very hard to comprehend for many people.Looking at the figures with relation to one or two households may be easier.
Many people own a semi -detached home .The value mostly the same as the adjoining semi.Figures show 10 years ago the average price for a semi was £200000 .In 2018 £230000.If someone has taken a Lifetime Mortgage out 10 years ago of say £60,000 at 6% compounding interest rate they would now have a debt against their property of £107450 which will continue to increase annually.Conside

justjohn

Harryo wrote: »

Not at all.


I have friends who have retired who say they dont know where they found the time to work. I also have friends who say they have had enough and cannot wait to retire.I realise I am a bit different. I do not consider my self to be a workaholic as I do like to do the other things. I do however get up each work day and look forward to what I will be doing.I have never thought about retirement or planned for it, probably on the basis that it was so far into the future. That perhaps has been a very big mistake as the future comes with a blink of the eyes.

I always hated working. My retirement(semi) is just around the corner and i hope i have plenty time left in me lol . i am 48 . i never planned to retire at this age however i think the time has come now.

Onlooker

New lending rules to be introduced on the instructions of the Financial Conduct Authority in consultation with the Parliamentary Treasury Committee after a 4 year campaign by Martin Lewis of MSE to stop mortgage prisoners moving to a cheaper deal.Over 150,000 borrowers will benefit initially.The word imprisoned is used to describe the treatment of the borrowers.Even both houses of parliament have said get it done quickly.
Along the same lines is the Early Repayment Charge of 25% applied to Lifetime Mortgages which in many cases leaves trapped borrowers unable to move to cheaper rates because that and the loan amount leaves no margin to leave financially.Switching should be free as in many other financialcontracts.Consider

Onlooker

One of the things that borrowers are rightly advised to do is look into the pros and cons of taking out a Lifetime Mortgage.An article in one of the daily newspapers showed figures regarding amounts been borrowed and some of the usage of the monies raised.Some of the pros.
The cons did not get a mention.i.e How much would be owed on £76,500 borrowings say 10 or 15 years rom now.The danger of deliberate deprecation of assets would have on any borrower some time in the future.This could see some of the monies lent in a helpful manner being claimed back from said families by local authorities to pay for any such care.Look to both sides.Consider

Onlooker

Taking a £85,000 Lifetime Mortgage from your property say worth £34000.00 would reduce your holding in said home to £255.000. To recover those monies would require annual house price appreciation of 2% per annum for the next 15 years.Not guaranteed.Last 12 months alone showed an increase of only 0.9%.
In that 15 year period also the £85,000 borrowing will have also doubled in debt to around £170,000.
Consider