Remortgaging at 73

MWT

Alshamal said:

I also had a Lifetime Mortgage equity release  product offered ! £86.63 per month for life, 20.59% loan to value.Outstanding balance £35,000 total amount paid £50,593.40.

Looks like that was a slightly lower interest rate than the RIO?

Those total amount paid figures look likely to just be an illustration of what you would have paid over the first 15 years but of course the product runs on until you no longer need the house.

The key difference is that the equity release product has fixed interest for life.

Do take care to understand the options on the equity release as you can get products that allow payments, say up to 10% per year to cover the interest but do not require them, or you can agree to make interest payments monthly for a fixed number of years, or for the life of the mortgage...

Really it just depends on your plans as to how much choice and flexibility you want to retain.

Alshamal

Thanks for all your reply’s ,the attraction of the  ER is the outstanding balance of £35.000 stays the same!  I’m comfortable with the fixed monthly payment for life ,with the interest rate of 2.97%.
Is the interest rate of 2.97% a competitive one? And Is there any need to go searching for a more competitive interest rate?
  

MWT

Alshamal said:

Is the interest rate of 2.97% a competitive one? And Is there any need to go searching for a more competitive interest rate? 

The interest rate is reasonable for this type of product, but the better question is who did you go to to get advice on this product and what are they charging you for that advice...

Also what is the product fee and valuation fee for the product they have recommended to you?

Similarly are you using a lawyer they have suggested, or your own and what are they charging you?

On a relatively modest sum such as you are proposing to release, the fees can mount up to a significant proportion of the advance if you are not careful.

There are products out there with no product fees and free valuations, also advisors with no advice fee, so getting that part right can save you a lot of money and still leave you accessing the same range of equity release products and interest rates.

Alshamal

 I got the advice from the Nationwide. Free advice & valuation Free standard legal work for remortgage, and £1,000 paid on completion to go towards independent legal advice! I’m waiting for a product fee confirmation.

MWT

Alshamal said:

 I got the advice from the Nationwide. Free advice & valuation Free standard legal work for remortgage, and £1,000 paid on completion to go towards independent legal advice! I’m waiting for a product fee confirmation.

I took a quick look at the details Nationwide publish and it does seem to include all the product features I'd expect to see there including 'Downsizing Protection' and the ability to repay up to 10% a year which would let you pay off the annual interest if you wish.

Only thing I couldn't see there was the details of the Early Repayment Charge which would apply if you wanted to settle the mortgage at some point in the future before it terminated naturally or under the downsizing protection.

Always worth asking about that so you know what the penality would be...

A good answer would be something like 10% in year 1 reducing by 1% each year for example.

Alshamal

The early repayment charge is in the information I was sent!  It’s as the good answer you suggest !
The Product fee what exactly is this?  I’ve asked the question with the advisor and awaiting reply.

MWT

From their website it looks like there is no product fee for this one...

I'm sure the advisor will confirm...

Alshamal

There is no Product Fee just had it confirmed!

MWT

Looks like you are good to go then.

Alshamal

It looks like a good product to me! I’ve just had another conversation with an advisor whose figures are £3 pounds cheaper a month,but with his fees and solicitor fees,it would take 5 years to get to where I am with Nationwide!
I think it’s a no brainier!
Thanks for all your help and advice 👍