Life time maortages

all_lost

Has anyone heard of life time mortages...... Does anyone have one.
If so what is the catch. Spent 2 hours with a broker last night and it all meant sense but when I mentioned it to friends they all think I am mad.
Any advice would be great.. Thanks

dunstonh

We cant give advice on a couple of lines of text. (the board isnt authorised to give any advice on regulated areas so it would be discussion only anyway).

If could be a good thing or a bad thing. It depends on your circumstances. I generally treat it as something you do as a last resort to needing money.

I am suprised a mortgage broker is getting involved with a lifetime mortgage. Typically you find the extra risk involved in dealing with these tends to mean that IFAs (and some tied agents, but you wouldnt want to use them) are the ones giving advice in there areas.

6am

dunstonh wrote: »

I generally treat it as something you do as a last resort to needing money.

I have Barclays life time offset mortgage. Life time means that conditions will not change during life time of mortgage, i.e. I will always pay BBR+0.48 for the term of the mortgage. Why do you think it is a bad deal?

steveandel

It's not a 'bad deal' but it could be absolutely the wrong product for someone to choose depending upon their circumstances. Life time mortgages often have quite high early repayment charges etc so if you moved house or wanted to change your mortgage to a more competitive one within that period you could be hit with quite high charges.

payless

6am wrote: »

I have Barclays life time offset mortgage. Life time means that conditions will not change during life time of mortgage, i.e. I will always pay BBR+0.48 for the term of the mortgage. Why do you think it is a bad deal?

This is a "term tracker" - but is sometimes branded lifetime tracker by lenders

Lifetime mortgage is more commonly associated with "equity release" for older clients - often where interest is rolled up.

dunstonh

A lifetime mortgage is a form of equity release. Typically available for the over 55s. You are exchanging part of your equity in your house for cash and have a mortgage put on it which you do not repay but the interest gets added to.

One of the risks of lifetime mortgages is that when house prices go down or dont rise [enough], the ongoing interest roll up can quickly erode the net value for the estate and you can find you end up with no asset at the end to pass to beneficiaries.

As stevenandel says, its not the deal but the concept. You are basically cashing in [part or all of] your major asset and once that has gone thats it. Hence why it should be considered a last resort (or better worded as something you dont do unless you really have to).