Lifetime Mortgage

Onlooker

One day last week our daily newspaper contained 3 separate advertisements with regard to Lifetime Mortgages.All 3 companies gave the same limited messages .You will always own your own home.Yes but not without a 1st.charge against it thus reducing your % holding on said property forever.They say also that they will not take any more than 100% of the value of your property even if your debt has risen to more than that amount.Also you must firstly borrow enough to pay off any outstanding mortgage which will probably be at a lower interest rate than the one on offer.Consider

John_G_Jones

Onlooker wrote: »

One day last week our daily newspaper contained 3 separate advertisements with regard to Lifetime Mortgages.All 3 companies gave the same limited messages .You will always own your own home.Yes but not without a 1st.charge against it thus reducing your % holding on said property forever.They say also that they will not take any more than 100% of the value of your property even if your debt has risen to more than that amount.Also you must firstly borrow enough to pay off any outstanding mortgage which will probably be at a lower interest rate than the one on offer.Consider

I have considered. I have come to the conclusion that someone choosing to enter into a deal,like this because they want a shiny new car should not be allowed out in public.

For the rest of us though it is a product that can meet certain people’s needs.

veesharp

I do believe you may be wasting your breath John G Jones!

NYDULV

Hi
1st time forum use so please forgive me if I have done wrong by jumping in here

I have some questions regarding equity release

Members of my family who we help with finances are struggling and I would like some advice

Background
They are both in their early 70's
They own a house worth approx. £375,000
But still have an interest only mortgage of 170,000 that is costing them approx. £1000.00 per month ( This was a terrible rate but I think they could only get this due to their ages )
They cannot keep working but need to in order to pay the interest charges, so they are effectively renting the house form the bank!

I would like to know if there is any way to release funds out of the equity that the have or alternately defer the mortgage payments and also what the consequence of doing this would be, they are keen to leave some kind of inheritance but I don’t know if this is their top priority.

I know that the persons who will inherit the house are more interested in them having a stress free next 10 year rather than focusing on inheritance

Any advice is welcome please.

lizferris1984

csgohan4 wrote: »

the Devil is in the detail, if you didn't read the paperwork correctly, you only have yourself to blame.

To be fair I don't think OP said they were blaming anyone else did they? Asking for some objective insight isn't exactly denying responsibility. Or not from my POV.

Linton

Have they looked at remortgaging at a lower rate? My IO mortgage is much cheaper. I do not believe they could get a roll- up mortgage for such a high % of the capital value at their relatively young age.

I suggest they discuss their situation with a mortgage broker with specialist knowledge and experience of equity release.

AnotherJoe

NYDULV wrote: »

Hi
1st time forum use so please forgive me if I have done wrong by jumping in here

I have some questions regarding equity release

Members of my family who we help with finances are struggling and I would like some advice

Background
They are both in their early 70's
They own a house worth approx. £375,000
But still have an interest only mortgage of 170,000 that is costing them approx. £1000.00 per month ( This was a terrible rate but I think they could only get this due to their ages )
They cannot keep working but need to in order to pay the interest charges, so they are effectively renting the house form the bank!

I would like to know if there is any way to release funds out of the equity that the have or alternately defer the mortgage payments and also what the consequence of doing this would be, they are keen to leave some kind of inheritance but I don’t know if this is their top priority.

I know that the persons who will inherit the house are more interested in them having a stress free next 10 year rather than focusing on inheritance

Any advice is welcome please.

KISS. Downsize to a flat. One that costs less than the equity, eg around £200k.

robatwork

NYDULV wrote: »

They cannot keep working but need to in order to pay the interest charges, so they are effectively renting the house form the bank!

Well, everyone with a mortgage is doing that. This isn't really a Lifetime Mortgage question, just a normal mortgage question. I wonder how they ended up in this situation - how they were allowed to take out a mortgage that continued way past their retirements.

Anyhow, the way to release equity is to sell the house, and move somewhere they can afford with the equity left.

Onlooker

Three or more finance companies seem to be joining into the Lifetime Mortgage market.Why?It appears that most of them are losing out due to their investment in the annuities market which has collapsed by over 75% in the last 3 years.Where is there money to make?
The Lifetime Mortgage industry.They are involved in billions of pounds worth of householders property and making millions of pounds of profits.Sometimes not enough.Last year one of the largest providers gave notice to leave by their board to their chief executive ,he had earned himself over £8million over the previous two years but apparently not made enough for the said company.He will be going soon with another few million.Where do these monies come from?Consider

John_G_Jones

Was it at least a special kind of car; are the memories worth having mortgaged your future over?