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  • FIRST POST
    • Onlooker
    • By Onlooker 23rd Jun 17, 3:15 PM
    • 40Posts
    • 11Thanks
    Onlooker
    Lifetime Mortgage
    • #1
    • 23rd Jun 17, 3:15 PM
    Lifetime Mortgage 23rd Jun 17 at 3:15 PM
    We raised 45,000 with one of the leading providers 8 years ago but somehow failed to take notice of the future consequences of our actions on our property and the negative effect on our estate and family.
    After 8 years our initial loans increased due to added interesr to 65,580 .we have now been provided with figues
    that show after another 7 years our debt against our property will be 100,247 pounds and continue to increase
    at 5 to 6 thousnd pounds annually until it ends.
    We would advise famillies to obtain future estimates on their future consequences.
Page 3
    • Downsizer
    • By Downsizer 19th Dec 17, 8:00 PM
    • 15 Posts
    • 3 Thanks
    Downsizer
    Previously I gave the suggestion that downsizing was a far better option than being enbroiled in a Liftime Mortgage.Another option in that vein could even be to do it within your own family Parents with their own offsprings and vice versa.
    Now according to a national newpaper there could be the beginning of another option.House swopping.
    Two householders exchange their properties to suit each others needs .One maybe moving upmarket,the other party downsizing Could be a better than some of the suggestions being aired while I cannot see why downsizing would not be thing to think seriousley about.Why rent a room when you could sell one?
    • Onlooker
    • By Onlooker 21st Dec 17, 8:58 PM
    • 40 Posts
    • 11 Thanks
    Onlooker
    Today again 2 of the leading providers are advertising what is available to householders.Showing short term monetary advantages to releasing capital from their homes.They do not describe the effect of,as they put it,added on interest or rolled up interest will have on the future value of your estate.The real word for the rising debt is Compounding Interest which is not like a traditional mortgage.It is interest on the interest you have been charged annually.The effect is no matter what monies you raise and within a short range of interest rates in about 12/13 years the debt against your property will be doubled and in about 25 years tripled and the momentum will continue until the end.Upon making your own enquires ask for the providers comparisons with these examples.Consider
    • clairebeth
    • By clairebeth 22nd Dec 17, 10:44 AM
    • 160 Posts
    • 69 Thanks
    clairebeth
    The point of traditional mortgage repayments is that you pay the interest off in full each month. If not, the interest would compound and the borrower would eventually lose their house. So the main difference is not really in the way the interest is applied, it's that you, the borrower, are not paying the interest, to stop it from compounding.
    • Onlooker
    • By Onlooker 28th Dec 17, 12:41 PM
    • 40 Posts
    • 11 Thanks
    Onlooker
    Lifetime Mortgage
    To take out Equity Release by way of a Lifetime Mortgage should always be scrutised very carefully.The impact made on your estate in the future ,the residue left to your families should always be taken into account.Obtain figures before entering any contract with any provider.The results will show that what ever you release will double you debt in about 14/15 years and triple in about 25 years and carry on increasing through your lifetime.Hence the name.Also if you want to remove yourself from any mortgage you will be liable to a approx.leaving fee of 25% of the original loan.Get a 10,15,25 year forecast which will show exactly what you will owe.Consder
    • ACG
    • By ACG 28th Dec 17, 12:57 PM
    • 17,028 Posts
    • 8,917 Thanks
    ACG
    I have just seen an illustration sent to a potential client of mine, page 7 (of 13), shows what the balance of the Mortgage will be at the end of each year for the next 17 years.

    I have no idea if this was the case when you took out your Mortgage but it seems that the customer would be going in to this with their eyes open now a days.
    I 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.
    • Downsizer
    • By Downsizer 3rd Jan 18, 4:50 PM
    • 15 Posts
    • 3 Thanks
    Downsizer
    lifetime Mortgage
    It is again being advocated that the borrower should avoid the interest on their Lifetime Mortgage compounding by paying it off annually.This will be a great saving on the statement in the adverts stating no payments need to be made.Dependant on the size of the Lifetime Mortgage taken out about four to five thousand pounds every year would have to be paid.The question is if you arrive at the point when these payments cannot be met will you then have to revert to compouding interest for the rest of your lifetime period.Again I advocate that the option of downsizing should be considered .Any deal would be done within months without the protractive involment of a Lifetime Mortgage and the implications involved for a unknown number of years.
    • Onlooker
    • By Onlooker 13th Jan 18, 2:50 PM
    • 40 Posts
    • 11 Thanks
    Onlooker
    lifetime Mortgage
    Latest figures showed that over 40,000 households borrowed over 3.1 thousand million from the value of their properties.This represents an approx £80,000 loan taken out to be paid back mostly though a Lifetime Mortgage.
    The loan to be paid at the end of any lifetime subject to the addition of rolled up,added on,accrued interest.The word for this is Compound Interest which means interest is charged,usually annuly on the sum borrowed.This the most important information to have to hand before commitment.
    At the moment a round figure or 6% interest on said £80k would in year one would be £4800,by year
    17 it will be £12,193.00.Added to all the inbetween years the debt to be repaid would be £215,421.00
    and in a further 3 years £256,570.00. Of course the amounts borrowed and interest rates will vary so it would be in borrowers own safeguard to ensure the detail of said loan before any lifetime commitment
    or to consider another option.
    • robatwork
    • By robatwork 14th Jan 18, 10:49 AM
    • 4,396 Posts
    • 4,885 Thanks
    robatwork
    This is a weird thread with fairly random postings.

    There is an underlying assumption that the people taking out these mortgages are old, financially dumb, vulnerable and preyed upon by the evil banks and financial advisers.

    It's more likely that most people know exactly what they're doing when signing up, and if there's any fooling going on, it's the people fooling themselves by deliberately ignoring the effects of interest and on their eventual estate.

    I suspect it's just a conversation they don't want to have with their children - "we are taking money out the house now so there will be almost nothing left for you when it's time to sell" isn't an appealing thing to tell your kids.

    Of course if there was mis-selling then it should be dealt with appropriately.
    • Downsizer
    • By Downsizer 20th Jan 18, 4:34 PM
    • 15 Posts
    • 3 Thanks
    Downsizer
    Looking at previous postings on the decision on committing to a Lifetime of financial but unknown
    depreciation to anyones estate is as pointed out difficult.Many people are astute as many are vulnerable and any advice should of course be considered.The figures seem to be fairly accurate and open to correction but as been pointed out an entry into unknown future years in peoples financial wellbeing.
    In less than one year those who choose the option of Downsizing with the right advice will have a lump sum to enjoy and not a future committed to anyone but themselves.Consider
    • Downsizer
    • By Downsizer 30th Jan 18, 9:03 PM
    • 15 Posts
    • 3 Thanks
    Downsizer
    A previous reply pointed to the option of downsizing to raise monies for your future.They came from a newspaper article showing how about a third of your paid up property value could be turned into cash.The article used a figure of just over £100,000.In another article an ex-financial minister seemed to indicate that it was not a good option unless they used the monies raised to take out an annity.
    £100,000 would give the buyer just over £5000 per annum.The monies raised in downsizing spent at £5000 per year will last for about 20 years.Then the option of a Lifetime Mortgage could be taken shortening the length of time anyone would be involved if need be in paying years of compounding interest.In neither case can anyones lifetime be predicted but choice is at least open to you.
    • Onlooker
    • By Onlooker 8th Feb 18, 4:53 PM
    • 40 Posts
    • 11 Thanks
    Onlooker
    Lifetime Mortgage
    As the reports coming though have said over 1.8 million householders with interest only mortgage payments are going to have to take up large new options to take care of their futures.There can be no guarantee up or down on house inflation therefore any option taken must be carefully examined.
    For example if a Lifetime Morgage of £50,000.00 at 6% is taken against a property valued at £250,000, for example ,those borrowings with compounding interest will rise to a debt of £214,593.00.in 25 years
    A housing inflation rate of 1% annually would put the market value of said property at £320608.00
    If said figure was 3% annually it would be £523,444.00 leaving approx. £309,000.00 in your estate.As foresaid inflation or even deflation cannot be guaranteed.
    • Onlooker
    • By Onlooker 19th Feb 18, 1:07 PM
    • 40 Posts
    • 11 Thanks
    Onlooker
    Lifetime Mortgage
    A half page advert on a national newspaper regarding Equity Release needs some clarification.Apart from other statements is says maintain 100% homeownership with an asterisk.At the bottom it says to own your own home ownership you must take out a Lifetime Mortgage.One doesnt happen without the other.As a legal charge will be applied against anyones property then your equity in your property will of course diminish to some figure below 100%.
    They also put in a minimum fee charge of £1495.00,up £100.00 from previous adverts ,which is the equivilant of borrowing almost £75,000 @ 1.95%.If these conclusions are wrong then they are open to correction.
    • Onlooker
    • By Onlooker 27th Feb 18, 2:20 PM
    • 40 Posts
    • 11 Thanks
    Onlooker
    One of the serious aspects of taking up a Lifetime Mortgage is how long will anyones involment be and what are the consequences.
    The vast majority of said mortgages will be taken out by couples through joint ownership of their property.The fact that one person will pass away before the other should be taken into account.The survivor will be left to contend with ,beside other financial difficulties,the ever increasing affect of the increasing debt against the equity in their property.
    They may have reached a point where to sell and move on to a smaller property but the loan could have
    reached proportions whereby they would be insufficient funds to take up this option plus having to pay the early release charge.The timescale cannot be guaranteed but the risk will be there.
    • John-K
    • By John-K 27th Feb 18, 7:09 PM
    • 654 Posts
    • 1,016 Thanks
    John-K
    May I ask why you!!!8217;re posting pretty much the same thing over and over? I think that just about everyone understands the deal with lifetime mortgages. I get that you do not, but why the repeated posts?
    • AnotherJoe
    • By AnotherJoe 27th Feb 18, 8:15 PM
    • 9,603 Posts
    • 10,676 Thanks
    AnotherJoe
    I would guess the OPs parents took one out and and deprived him of his inheritance.
    • robatwork
    • By robatwork 28th Feb 18, 10:35 AM
    • 4,396 Posts
    • 4,885 Thanks
    robatwork
    Looks like a bot copy-pasting
    • Onlooker
    • By Onlooker 9th Mar 18, 5:41 PM
    • 40 Posts
    • 11 Thanks
    Onlooker
    Lifetime Mortgage
    A repeat advertisement in a national newspaper uses the headline £85,000 as a further temptation to people to enter the Lifetime Mortgage market.Again it shows not enough insight as to what the future
    consequences would be to anyones estate
    This figure is premise to opening discussions with people who may or may not want to borrow more than £10,000a but you will be offered up to 8 times more.This is the drawdown factor which gives you leave to freely go back for more.
    Get written figures to show what your indebtness for every borrowing over a 5,10 or even a 20 year period and consider the costs when your plan ends.There are alternatives.
    • John-K
    • By John-K 10th Mar 18, 9:10 AM
    • 654 Posts
    • 1,016 Thanks
    John-K
    Again, you have not had the courtesy of answering questions, but are just spamming the forum with nonsense.

    Post reported.
    • Downsizer
    • By Downsizer 15th Mar 18, 5:18 PM
    • 15 Posts
    • 3 Thanks
    Downsizer
    Downsizing
    Downsizing is in our opinion the better option to getting involved in the committments of the intricuites of a Lifetime of concerns created for some by opting to borrow monies that way.
    Of course taking the option of moving home evokes a great deal of emotions but should still be considered from a financial point of view.From a practical point of view the same outcome ,i.e.raising monies without being in a lifetime increasing debt ,would be a better option.
    We did it ,a new cheaper home to suit in more ways than one and at in most cases with no more initial costings and a nice lump sum to spend.
    Be practical.make yourselves some money.
    • Onlooker
    • By Onlooker 20th Mar 18, 12:24 PM
    • 40 Posts
    • 11 Thanks
    Onlooker
    Lifetime Mortgage
    Understanding the intricaties of Equity Release is not easy to understand by many people.To maybe help you could helped a great deal if you looked into a programme on BBC Iplayer .It is a series entitled Holding Back The Years.Series 2 Episode 1 shown on Monday 12th.March deals with Equity Release and in particular Lifetime Mortgages.Watch the real life cases and listen to the advise provided by a Financial Expert.
    You may be able with more understanding of what you will be committing in your undetermined future and make the right decision.
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