Lifetime Mortgage

poppy10_2

Onlooker why did you take out a lifetime mortgage to pay for a new car and a holiday, without reading the terms and conditions for what you were signing up for?

MoneyGeoff

If you're thinking of releasing equity,
Then good advice is key!

Consider.

Onlooker

The best thing about MSE is that anyone with their own opinion about any subject can voice their opinion and leave to the readers to view all points of view and make their own judgement ,hopefully with a little more knowledge.
Two full centre pages of a national paper i.e 24 columns discussed the pros and cons with regard to what people should take into account when looking at a Lifetime Mortgage .The important alternatives which are their took up 3 lines.Get a part-time job,check out your state pension or downsize all of which are not given the attention they deserve.Consider

SpiderLegs

It’s seems like the worst thing about MSE is that anyone can repeatedly post the same thing over and over again without any need to further engage with the user base in a sensible discussion.

I’ve scanned through this thread and it appears the OP stopped answering any questions on about page 3. Since then it looks mainly like repeat ad nauseam and other posters growing increasingly weary of the repetitive nature of the OPs complaint.

I’m putting this one on ignore.

Onlooker

Well done again to Martin,MSE taking on Facebook and somehow costing them £3milion which they at his suggestion contributed to The Citizens Advice Bureau.Hoping the next step will be to get the Early Repayment Charge from exiting from a Lifetime Mortgage early.One aspect of a Lifetime Mortgage is the effect house price inflation has on any borrowings made..Annual inflation last year was 0.7%.To protect from further loss to any borrowers home it has to be over an average of 2% per annum.The average for the last 10 years has been 1.9% Consider

Thrugelmir

Seems as if many are prepared to take the risk and enjoy the money.

A record £136 of housing wealth was unlocked every second between October and December 2018 as the equity release market continued to boom, latest figures have shown.

The Equity Release Council, which represents 95 per cent of the equity release market, has released its fourth quarter lending figures showing older homeowners unlocked £3.94bn of property wealth in 2018, up almost a third (29 per cent) year-on-year, with an unprecedented £1.08bn of housing wealth unlocked in the final quarter of 2018.

The market saw 46,000 new customers in 2018, an increase of 25 per cent on 2017, with 12,891 new equity release plans agreed in the fourth quarter of 2018.

The number of returning drawdown customers was also up 27 per cent, at 32,750 in 2018.

However, the number of further advance customers dropped 6 per cent to 3,644.

David Burrowes, chairman of the Equity Release Council, said older homeowners were warming to the idea of accessing property wealth alongside their pensions.

He said: "Industry, regulators and government must continue to explore how we can help generations of retirees, both today and in the future, to adopt a more rounded approach to later life planning.

"With a growing choice of products and features on offer, the market is maturing and adapting to offer a new level of flexibility to suit a range of financial needs and ambitions, from funding care costs to helping children to buy their first home.

"Equity release now plays a pivotal social role and the Equity Release Council will continue to ensure that products are underpinned by robust consumer safeguards."

As of August 2018, 139 product options were available to consumers, more than double the 58 seen two years ago and up from 24 in 2007, according to the Equity Release Council.

However, while the customer base has grown to new levels, the average amount withdrawn by homeowners has remained steady, the data shows.

During the fourth quarter of last year, the average first instalment of a drawdown lifetime mortgage was £63,530, up slightly from £62,359 a year earlier.

The average new lump sum lifetime mortgage in the fourth quarter was £96,515, down from £101,913 in the fourth quarter of 2017.

Drawdown products were chosen by 65 per cent of new customers.

Nicholas Georgiou, mortgage broker at Westgate Mortgage Services, said equity release made up 70 per cent of his business and he expects the market to keep growing.

He said: "Lenders are offering more flexible products, but advisers still need to understand the market well.

"I have a client who took out an equity release product in 2014 and is deeply unhappy about the early redemption charges.

"Products are more innovative now, of course. But if a client has sufficient funds and doesn’t mind making monthly repayments, I would always advise going for a residential mortgage first."

Steve Ellis, chief executive of Legal & General Home Finance, said: "The decline of final salary pension schemes, living longer in retirement and the growth in property wealth amongst the over-55s has certainly contributed to the rise of retirement lending, but over the last year we’ve seen big changes to this market.

https://www.ftadviser.com/mortgages/2019/01/24/equity-release-nears-4bn-mark/

poppy10_2

Onlooker why did you take out a lifetime mortgage to pay for a new car and a holiday, without reading the terms and conditions for what you were signing up for?

Onlooker

Look at Retirement Interest Only morgages for the later in life generations.They act as do Lifetime Mortgages till you move,go into care or pass away.Many providers offer loans of up to 50% of your paid for property.You will have to prove that you have enough retirement income to keep up monthly interest only payments.
If done with proper understanding you can have a sum to be paid off interest only.Done right the equity in your property will leave you with double what you would have with a Lifetime Mortgage over the same number of years of retirement.Consider.

Harryo

As far as I can see, there are absolutely no disadvantages to a Lifetime Mortgage over a RIO IFyou pay the interest, if you choose the right product. The end result for both is that the original borrowed amount will need to be paid back at the ""change of life"" time. There are no penalty payments if you die, go into long term care or move (assuming the new property is standard type construction).


The MAJOR advantages of a Lifetime Mortgage, IF your plan is to pay the interest are:


1. You can pay back up to 10% of the capital borrowed each year if you are able at any time, without penalty, and therefore you could payback the LM within under 16 years if you so wished.

2. There is no requirement to demonstrate affordability.

3.You have the security knowing the baliffs will not be sent in if your financial situation changes for any reason and you cannot afford the interest, or you decide you want to spend the interest on something either as a one off or continuously - you are in control.

4.The interest rate is fixed for as long as you have the LM.


I did say ""absolutely no disadvantages"". That is not strictly correct. The interest rate on a LM is usually a bit higher than a RIO but you know what that is to begin with and also it is fixed.

lozthomas

My parents are considering ER/Lifetime mortgage. From what I'm reading its not a great solution for them or my siblings and I. Instead, can I buy a % of their home from them?