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  • FIRST POST
    • Onlooker
    • By Onlooker 23rd Jun 17, 3:15 PM
    • 33Posts
    • 10Thanks
    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 4
    • worid
    • By worid 20th Mar 18, 1:16 PM
    • 9 Posts
    • 4 Thanks
    worid
    Ok a lifetime mortgage is equity release but an interest only lifetime mortgage may help those who are on an interest only mortgage whose time is running out. The interest rates appear to have fallen quite a bit since I last looked at this in 2014 and it appears that some banks are now offering it if their clients interest only mortgage has ended.

    I have a repayment mortgage which will not end until February 2025 when I will be nearly 76. I am tempted to get an interest only lifetime mortgage wherby I borrow enough to pay off my existing mortgage which is less than 15% value of the house and pay the full interest owing each month. Then when I die all I will owe is the original amount borrowed.

    I have been in touch with Step Change and if anyone has any dealing with them I would be grateful for your input. They do not charge for advice and are salaried so apparently do not push for certain products but only those that suit your personal circumstances.

    The reason I am considering it is because although I can just about manage I have no money at the end of the month and no savings and I am a fairly frugal person. Which means entertainment is very limited and holidays are out of the question.

    I have a 5 year fixed interest rate which ends in 2 years at 2.99%. Then will need to negotiate the remaining 5 years.

    It all depends on the rate of interest and the repayments each month some quotes are 3.98% but if there is no considerable difference I will not go ahead.

    There are also upfront costs like a surveyor and solicitors fees and arrangement fees which would probably amount to a £1,000 - so quite a big mistake to make if it doesn't work out.

    If anyone has considered or taken this step I would be grateful for your input.

    It would be difficult to downsize as at lower end of the market.
    Modify message
    • Dandytf
    • By Dandytf 20th Mar 18, 2:57 PM
    • 1,225 Posts
    • 403 Thanks
    Dandytf
    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.
    Originally posted by Onlooker
    Thanks I'm 45 yrs -thinking ahead from 55 yrs.
    Since watching the recommended episode via ipadpro/bbciplayer.
    Seems the sensible advice is DON'T consider equity release at least until 70's+ or RISK owing upto the total value of your home.
    Though there was a positive example on helping family +nice20k home improvements loan for the homeowner.
    I don't think equity release is ever going to be a simple decision.
    If the good times return-there's nasty companies will be in overdrive mode for product sales -no doubt.
    I did up until watching that prog' maybe thought from 55 equity release could be better than unsecured loan-now I don't want to go near equity release.
    Simple question-What does a single person do with equity if happy living at home alone.
    Last edited by Dandytf; 20-03-2018 at 3:01 PM.
    sc dmp 2012 13k
    Jan 2018 8840 paid. 60% approx.
    • John-K
    • By John-K 20th Mar 18, 7:12 PM
    • 654 Posts
    • 1,009 Thanks
    John-K
    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.
    Originally posted by Onlooker
    This is not even coherent English at this point, let alone a coherent argument.

    Equity release is not intricate. It is not comp,ex, it is not confusing, it is a simple product that suite some and does not suit others.

    The main problem seems to be that it lets people spend some of their own money which upsets those family members who expected a fat inheritance.
    • Onlooker
    • By Onlooker 24th Mar 18, 11:25 AM
    • 33 Posts
    • 10 Thanks
    Onlooker
    The programme on BBC1 regarding Lifetime Mortgages included evidence of the experiences of two ladies.Helen borrwed £32,000 six years ago when 62 yearsold.Her annual statement shosw her now owing£49,000,perhaps including a 25% early leaving escape chargeHer feelings are now expressed.She feels now that she has nothing to look forward to except; depending on her liftime,losing most of her childrens inheritance.
    The other lady raied £80,000 from her £205,000 property to give £60,000 to her son as a deposit.
    Good but the backlash will be that his inheritance i.e her home will have a charge of at least £158000
    against it in about 14 years and about £212,000 in about 20years dependant on the compounding interest rate charged.
    The financial advisor appearing on this programme suggested if people want to enter this market they should leave it to 70 years plus Earlier than that could have them trapped in their own home because the charge against their property would not leave enough revenue to sell up and move on.Consider
    • ACG
    • By ACG 24th Mar 18, 11:42 AM
    • 16,833 Posts
    • 8,784 Thanks
    ACG
    Onlooker, what you are missing/ignoring is that people are getting huge lump sums of money and then not paying anything for years.

    People who take out equity release mortgages are 100% aware of what will happen to their mortgage balance (at least now a days). The image below is an example of what appears in the illustration (prior to signing up) and offer (after signing up). If they do not understand this, then they have not read the paperwork or should ask their advisor. Just to add, I do not do equity release so have no vested interest in this.



    Yes there is a near £30k increase in 10 years, but proprty prices usually go up also and even if not, you can not really argue that it is not clear.
    Last edited by ACG; 24-03-2018 at 11:47 AM.
    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.
    • Onlooker
    • By Onlooker 2nd Apr 18, 8:29 PM
    • 33 Posts
    • 10 Thanks
    Onlooker
    Lifetime Mortgage
    People of a certain age always say that they understand.It is a pride thing which can be very costly if they get involved with the intricities of Equity Release.They could like us or the lady on TVs Holding Back the Years realise the trap that they have fallen into before it becomes to costly to buy yourself out.
    A £60,000 loan at 4.6% will reach £121,758.00 in approx.18 years.Thats a 100% increase and will always carry on at a add on of over £5000 per year till the end.It might suit some but not 100% of people.
    Consider an alternative,even the industry suggests you could get a part-time job.
    • Onlooker
    • By Onlooker 9th Apr 18, 5:15 PM
    • 33 Posts
    • 10 Thanks
    Onlooker
    Lifetme Mortgage
    No money worries-imagine that.Imagine that you dont check very carefully on your future worries with regard to what you will have to pay back .How much an effect it will have on your estate and maybe your famillies inheritance.You could pay back double or even triple your borrowimgs depending on the length of you and your partners lifetime.Imagine that..What you will be entering into will affect everything you do finanically for maybe up to 30 years.Imagine that. Consider
    • Edi81
    • By Edi81 9th Apr 18, 9:08 PM
    • 450 Posts
    • 311 Thanks
    Edi81
    Onlooker you sound like a broken record.
    Equity release is not for everyone but those that take it out need to be aware of the implications.
    End of story!
    • John-K
    • By John-K 9th Apr 18, 9:31 PM
    • 654 Posts
    • 1,009 Thanks
    John-K
    No money worries-imagine that.Imagine that you dont check very carefully on your future worries with regard to what you will have to pay back .How much an effect it will have on your estate and maybe your famillies inheritance.You could pay back double or even triple your borrowimgs depending on the length of you and your partners lifetime.Imagine that..What you will be entering into will affect everything you do finanically for maybe up to 30 years.Imagine that. Consider
    Originally posted by Onlooker
    Your posts are becoming incoherent. Do you actually know what you are trying to write at this point, or what you are trying to get across?

    These are simple products, and it is impossible not to understand the consequences. How can anyone, with a straight face, claim that they do not understand how interest works?
    • Onlooker
    • By Onlooker 14th Apr 18, 6:37 PM
    • 33 Posts
    • 10 Thanks
    Onlooker
    There is a bill going through Parliament at the moment and due to come into force next year.One of the main objectives is to give more protection to what they call people who face challenges when it comes to managing their finances.Levels of financial capability is their wording.
    To help the general public a new statutory body is to be set up combining the present Money Advice Service,The Pension Advisory Service and Pension Wise all to be overseen by the Financial Conduct AuthorityIt is to be called the Single Financial Guidance Body.S.F.G.B.
    A telephone/webchat service will be provided plus face to face support..
    Advice on Equity Release ,Pensions borrowings of all types to be covered
    Could be worth waiting for before making decisions on anyones financial future.Consider
    • Onlooker
    • By Onlooker 19th Apr 18, 6:00 PM
    • 33 Posts
    • 10 Thanks
    Onlooker
    Lifetime Mortgage
    If someone decides to take out a Lifetime Mortgage of £40,000 at an interest rate of 4.5% their debt will grow to almost £85,000 in 17 years.Imagine that.This is only one of many variations of.amounts borrowed and compounding interest being charged.
    Now that the providers have got Carol on board ,imagine that,you will be able to have your calculations double checked before making any decision.Imagine that.
    • robatwork
    • By robatwork 20th Apr 18, 10:21 PM
    • 4,290 Posts
    • 4,697 Thanks
    robatwork
    If someone decides to take out a Lifetime Mortgage of £40,000 at an interest rate of 4.5% their debt will grow to almost £85,000 in 17 years.Imagine that.This is only one of many variations of.amounts borrowed and compounding interest being charged.
    Now that the providers have got Carol on board ,imagine that,you will be able to have your calculations double checked before making any decision.Imagine that.
    Originally posted by Onlooker
    Consider that you've managed to get "Imagine that" 3 times into your latest rambling.

    You do have some valuable information but it's a bit lost in your patronising tone.
    Last edited by robatwork; 22-04-2018 at 9:34 AM. Reason: More considering done
    • ianatkis
    • By ianatkis 21st Apr 18, 2:59 PM
    • 1 Posts
    • 2 Thanks
    ianatkis
    I'm a mortgage broker and have been for over 25 years now. So I've seen the Equity Release Products evolve over time. The issue 20 years ago was that interest rates were high which meant that the amount you borrowed doubled in 5 years. Rates are much lower now and products more flexible. Even if you didn't pay any interest back then it can take 17 or 18 years for the debt to double now.


    On top of that the products are much better. Take the new L & G product that is a lifetime mortgage and allows you to service the interest completely, or in part.


    Modern products also allow you a drawdown facility. So you can take the smallest amount you can manage initially, in the knowledge that if you need more money later it is available. This is always best advice, as it reduces the compounding effect of the interest being charged.


    Lifetime Mortgages are not for everyone, but you certainly shouldn't just assume that they are not suitable for you, without first talking to a knowledgeable broker who will talk you through the different products honestly and impartially.
    • robatwork
    • By robatwork 22nd Apr 18, 9:40 AM
    • 4,290 Posts
    • 4,697 Thanks
    robatwork
    Lifetime Mortgages are not for everyone, but you certainly shouldn't just assume that they are not suitable for you, without first talking to a knowledgeable broker who will talk you through the different products honestly and impartially.
    Originally posted by ianatkis
    Ian you could get people to sign in their own blood that they FULLY understand that they or their estate will have to pay the balance, and they or their inheritors will still complain they were mis-sold.

    I'm afraid head-in-the-sand syndrome is in the nature of the beast.

    Whenever this is discussed on shows like R4's Money Show they never actually ask the children what the money was spent on, or if it provided a nice extension, a world cruise, nice car, life-saving surgery etc. Focus is always, unfairly, on how the parents were duped into it all.
    • Onlooker
    • By Onlooker 23rd Apr 18, 6:38 PM
    • 33 Posts
    • 10 Thanks
    Onlooker
    Maybe I was mislead by 4 consectuative days adverts by a provider user the term Imagine That plus Carol joining in to point out the benefits of Lifetime Mortgages .At a risk of being condemned the same space is not taken up with simplified detail to help those who face challenges when it comes to managing money.Repeat,a bill is going through Parliament designed to protect people with different levels of financial capability.It is called the S.F.G.B.Consider
    • robatwork
    • By robatwork 23rd Apr 18, 8:46 PM
    • 4,290 Posts
    • 4,697 Thanks
    robatwork
    Hmm I guess you mean Carol Vorderman.... so she's fronting Sun Life

    https://www.mortgagefinancegazette.com/lending-news/equity-release/carol-vorderman-fronts-sun-lifes-entry-equity-release-space-20-03-2018/

    Looks like she has been in some hot water previously "persuading" older people to part with their cash

    http://www.thisismoney.co.uk/money/cardsloans/article-1598479/Vorderman-slammed-over-TV-ads.html
    • Onlooker
    • By Onlooker 28th Apr 18, 6:17 PM
    • 33 Posts
    • 10 Thanks
    Onlooker
    Lifetme Mortgage
    2006 is as far back as I can find with any information with regard to Ms.Voderman being involved with,what shall I say unfortunate advertising, secured loans which were described as being more advantagious to the lender than the borrower.
    She is good with figures as been proved many times ,maybe she can agree these.figures.
    A full page ad.in a national newspaper costs approx.£30,000.Twice a week costs £60,000
    Per year the cost is £3.12million Thats a lot of money of raise from the man in the street.Consider
    • Onlooker
    • By Onlooker 4th May 18, 5:31 PM
    • 33 Posts
    • 10 Thanks
    Onlooker
    Lifetime Mortgage
    One of the pieces of advice given to people considering taking out a Lifetime Mortgage is the suggestion that they can take up the option of paying the interest as they go.That could cost maybe £50.00 plus per week dependant on the amount borrowed and the interest charged.
    At sometime in the future borrowers maybe not able to raise these monies so said Mortgage will start to charge the compounding interest for the next unknown number of years
    If anyone is not happy with being in that position they could opt out of the Mortgage subject to having to pay the loan in full plus a early repayment charge of around 25% of the orginal loan.
    An answer could be take a normal loan at the same costing and then you will be able to put off
    getting involved in the intricities of a Lifetime Mortgage till much later in your life which is an
    another recommend.Consider
    • ACG
    • By ACG 5th May 18, 7:41 AM
    • 16,833 Posts
    • 8,784 Thanks
    ACG
    At sometime in the future borrowers maybe not able to raise these monies so said Mortgage will start to charge the compounding interest for the next unknown number of years
    Originally posted by Onlooker
    Where as if the customer had a "normal" interest only mortgage and could not repay the Mortgage, what would happen then?

    Arrears?
    Have to sell up?
    Get evicted?

    As I have stated all along in this forum, Equity release is not for everyone. But you seem to have a very blinkered view.
    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.
    • Onlooker
    • By Onlooker 8th May 18, 8:36 PM
    • 33 Posts
    • 10 Thanks
    Onlooker
    Lifetime Mortgage
    Every Lifetime Mortgage provider requires that all borrowers have to initially payoff any outstanding mortgage before any other monies are released from their property.I imagine that in some of the cases listed this could be impossible unfortunately for them.Those in a position to go forward should still be aware of their future committments.I have seen two of the leading providers curtail their paper postings lately with regard to the always misleading statement i.e You will always own 100% of your own home which was never true because of the legal charge made.Have these changes been made because of some pressure from the Financial Conduct Authority?To work out what Age Partnership meant in their original advertisement would take some doing
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