"Lifetime mortgages"

DStevens

Hi.

I'm seeing ads for "lifetime mortgages" on TV.

What does this involve?

The short version is my wife and I are in a house. Mortgage, £155,000, Value £215,000. We have no immediate family, so it's not like we're looking to leave an inheritance to kids, etc.

Everywhere I look on the interweb is asking for name / address, phone, email, etc., and I'm not ready to face a barrage of sales calls just yet.

Thanks for any advice.

kingstreet

Have a read here;-

http://www.equityreleasecouncil.com/home/

as there are different types of products which come under the equity release/lifetime mortgage umbrella.

ACG

You can basically take out one of these mortgages, where it will provide a lump sum. Your current Mortgage would need to be paid off.

How old are you both? I think you might struggle to get the amount you need unless you are both around 80+ or in very poor health.

I have just put the figures through one calculator and it says £120k if you are both 80. But it would be worth speaking to an actual Equity Release advisor.

dimbo61

You have a larger mortgage ?
How are you going to pay it off ?
Age, income, savings, ???
Maybe you need to start looking at overpaying the mortgage if young enough or selling up and moving into cheaper rental property.

AnotherJoe

I’d say based on the relatively low equity you have, you have very limited possibility of getting any equity release.
As said above it would depend also on your ages.

Is it by chance an interest only mortage ? If so how long has it got to go ? And what is your income ?

AnotherJoe

ACG wrote: »

You can basically take out one of these mortgages, where it will provide a lump sum. Your current Mortgage would need to be paid off.

How old are you both? I think you might struggle to get the amount you need unless you are both around 80+ or in very poor health.

I have just put the figures through one calculator and it says £120k if you are both 80. But it would be worth speaking to an actual Equity Release advisor.

How would it give them 120k if they only have 60k equity ? Are you assuming they have an endowment or similar policy that will pay the mortage off ? Or would a company really in effect swap the OPs mortage for a lifetime one to get the 60k equity ?

ACG

I am using a calculater that says based on their age (assuming 80) and assuming average health. The equity release company would provide £120k. That money would not be enough to clear their current Mortgage - which is why I have said I do not think the figures stack up.

If they are significantly younger than 80, then it is very unlikely to fit. That is not to say there are not options, I do not currently do equity release Mortgages but if I had to put money on it, I just can not see this working based solely on what has been mentioned in the initial post.

DStevens

Hi all, thanks for the replies.

I think, based on my age (56) this is a no-goer.

Thanks.

ACG

DStevens wrote: »

Hi all, thanks for the replies.

I think, based on my age (56) this is a no-goer.

Thanks.

Probably not, but there is no harm speaking to someone fully qualified. They might agree and say you are a million miles out, but they will very likely know things I do not, so definitely worth a bash.

getmore4less

I would have thought there is a market for a lifetime interest only product for those like the OP don't want or need their capital tied up in an asset they have no one they want to pass it onto.

There is the longer term issue of how you transition into something more suitable for retirement if they have not invested enough capital to maintain the interest payments.

For a 40% taxpayer in a low interest environment like we have the tax benefits of deferred payment are probably very beneficial.

dimbo61

All you can do right now is overpay the mortgage every month and build up equity in your home.
You could also pay more into your pension