Lifetime Mortgage
Comments
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The couple who raised 20,00 with a Lifetime Mortgage as advertised in the press
seem to have performed an excellent job with that loan.How?
Initial payment to them after set-up charges say 18000,less say a necessary payment
on their existing property,say 3000?A kitchen extention?7000? Car upgrade 2000?
Holiday 2000?4000 residue maybe.It appears that these people have always been
compedent with finance so why have they not realised the pitfalls in their future of
taking equity in their property0 -
Sorry the loan taken out should have read 20,000 otherwise it would have been a miracle.Talking of
figures if 50 householders decided not to raise that 20,000 they would save themselves 1million now
and probably another million later in their lifetime.Consider.0 -
The couple who raised 20,00 with a Lifetime Mortgage as advertised in the press
seem to have performed an excellent job with that loan.How?
Initial payment to them after set-up charges say 18000,less say a necessary payment
on their existing property,say 3000?A kitchen extention?7000? Car upgrade 2000?
Holiday 2000?4000 residue maybe.It appears that these people have always been
compedent with finance so why have they not realised the pitfalls in their future of
taking equity in their property
Perhaps they had the wit to pay off the interest to stop it accumulating?
Maybe it was their only option and they were content to have the money now rather than leave it to well off children ?
Maybe they've got no one to leave the equity to so it's worthless to them?
Maybe it was preferable to downsizing ?
Maybe they aren't bitter and twisted because they didn't expect someone to plant a magic money tree in their garden ?0 -
what did you need the 45k for op?
did you think the deal was you can take 45k out of your home, pay nothing for an indeterminate period of time and they take the 45k back when you die or did you think there would be interest charged but you had no idea how much - in which case why didn't you ask?
if the 45k was for something you desperately needed, house repairs, a new car etc and you could not afford the repayments and it was either do this or have a dilapidated property or you would be isolated as there are no busses where you live then it seems the 45k lifetime mortgage was a good idea as you would not have got a traditional mortgage if you do not have the income required to repay it.
if you spent it on holidays, frivolity, tat and basically wasted it then yes it was not the smartest move but at the end of the day it is your house and your money. If the kids want to protect their inheritance could they pay the interest on the mortgage to stop the debt increasing further? Explain to them you can't afford to pay the interest and it is their inheritance going to the bank and give them the choice - they can pay the interest now and keep the capital or they can leave it as it isI am a Mortgage Adviser
You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
Donsizing v Lifetime Mortgage. The average amount homeowners ar looking to
raise from their properties is at the moment 80000 .One choice is Euity Relrase
80000 raised at say 4.9% compounding interest would in 5years leave someone
owing over 101,000 .In another 5 years this will be over 129,000 and raising
year on year for your lifetime.Early repayment can be made but will be charged
up to 25% of the original loan on top of interest accrued.
Downsizing is different in that if you raise monies that way the transations will
be done in months and no one will be committed to years of rising debts.
Of course there will be legal charges on both choises to be taken into acconnt.
With downsizing and one-time stamp duty maybe more but paid up immediately
With a Lifetime Mortgage it is deducted from your lump sum but left in your
gross borrowings ,charged interest on thus doubling or even trebling these legal
charges for the lifetime of said mortgage.
An emotional choice either way .Consider deeply,ask the family get advice.
We did0 -
There is an advert on the tv at the moment ( on nearly every day ) where the couple take an equity release morgage " to give them some money for home improvements and to PAY OFF THE MORGAGE " unbelievable but some people must use it.ITS NOT EASY TO GET EVERYTHING WRONG ,I HAVE TO WORK HARD TO DO IT!0
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You cannot raise a Lifetime Mortgage without paying off your existing mortgage and then taking on a
legal charge against your property for any monies that you borrow to pay what you owe plus any new borrowings you make.0 -
One of the couples who raised a 20,000 Lifetime Mortgage state that they will not be worried
by debts in their future.They may be debt-free for the moment but will receive annual statements
proving othewise and rising year by yearf for the length of their lifetime.
On that point another advert states that you can remain in your home as long as you choose.
To choose anything other than seeing the Lifetime Mortgage to its conclusion and decide
to return to total ownership of your home will entail repayment of the original loan plus
compound interest plus up to 25% of original loan.Consider..0 -
We have just received our annual statement showing as usual a four figure interest addition to our
Lifetime Mortgage.As usual we question the fact that we cannot switch to a lower interest rate,of which there are aplenty even with our own proidvers,without paying an early repayment charge which can come to 26% of any original loan.Even swiching at this cost will take 5/6 years before any benefit of taking this action.
MSE is full of switching solutions for customers financial benefit but not the Equity Release market.
The above conditions will apply immediately anyone signs up to a Litetime Mortgage.Consider0
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