Lifetime Mortgage

clairebeth · 2 September 2017 at 2:49PM

Ok, so you need to pay a £12,000 fee to get rid and remortgage. How much interest are you currently accumulating? What rate? What is current balance? Perhaps you need to admit you made a mistake, cut your losses, pay the £12,000 and remortgage to a more sensible situation? This is something you could maybe speak to your children about, seeing as it's presumably their inheritance that is dwindling away in interest every year. They may choose to pay it off for you now, to stop any more money going down the toilet?

debbre41 · 24 September 2017 at 8:55AM

Hi all. My parents are in the same position
There is now a first charge on the house with the lending company.
My question is : how can we pay it off? Can I buy part of the house so that they can pay it off?
Does anyone have any serious suggestions?

ViolaLass · 24 September 2017 at 9:02AM

Onlooker wrote: »

Of course we blame ourselves.Insight is a great thing but been faced with over 40 pages of litrature we are having to live with it.We certainly now see the intricaces of the business.To switch will in our case cost 25% of the loan,i.e.11,250pounds and at whatever reduced rate would take 6/7 years to recoup.Not very viable.Compounding Interest is added to your loan of course but the effect and the speed at which it will diminish your estate eccesive to say the least.To be able to afford to pay off the interest annually would be nice but not possible in our case.The only saviour can be house price inflation but no-one will guarantee that..As we have stated people should aquire 10/15/or 25 year forecast against the release that they are considering plus interest rolled up over the years ahead

Did you need the £45k? (I assume you)

Then what else could you have done? Would you not be in a worse position if you had not had it?

mummytofour · 24 September 2017 at 8:32PM

Onlooker wrote: »

Of course we blame ourselves.Insight is a great thing but been faced with over 40 pages of litrature we are having to live with it.We certainly now see the intricaces of the business.To switch will in our case cost 25% of the loan,i.e.11,250pounds and at whatever reduced rate would take 6/7 years to recoup.Not very viable.Compounding Interest is added to your loan of course but the effect and the speed at which it will diminish your estate eccesive to say the least.To be able to afford to pay off the interest annually would be nice but not possible in our case.The only saviour can be house price inflation but no-one will guarantee that..As we have stated people should aquire 10/15/or 25 year forecast against the release that they are considering plus interest rolled up over the years ahead

But the thing is, you won't need the house one day and what you leave and don't leave your kids is your choice. I know you feel bad but it's your house and it's up to you if you took out a lifetime mortgage. For some people this is the only way they can afford repairs, holidays etc and to be honest, enjoy your life xx

Worried2 · 8 November 2017 at 2:52PM

The MSE site provides so many sites giving information as where to seek savings on Energy,Car Insurance,Home insurance,Bank accounts etc.Some providers even
rewarding customers for joining them.
The Equity Release market does not give this service for free.A Lifetime Mortgage cannot be switched to obtain a lower rate of compounding interest with another provider or even your own provider.This is because one of the terms signed for is that you would be liable ,on top of any monies owed ,for an early repayment charge of approx. 25% of your initial borrowings.
This charge will apply at any time..Why is switching not free?

Downsizer · 16 November 2017 at 10:34PM

A recent newspaper article showed Downsizing as an option of raising capital from your property.Somebody sells their property for 310,000 and downsizes to a smaller home costing 197,000 Taking into account selling ,buying and other fees they were left with a residue,tax free,of 100013. to spend as they chose.
Another well advertised option is a Lifetime Mortgage.Using the same figures and release 100,000 yo u will be charged a compounding interest rate of around 6%
This will add 79000 to your debt in 10 years from now,114000 in 13 years and in 20 years the amount due will total 320,000.
We opted for the first option after assessing the costings.

Downsizer · 30 November 2017 at 5:24PM

Sell a bedroom.That is my look at Downsizing.4bed down to 3 or 3bed down to 2 could in some households be an option which will provide a 5 or 6 figure lump cash reserve not subject interest charges.You will even gain some monies in interest on your cash in hand. Not summiting to legal charges which would ensure you will never own 100% of your home
The figures quoted also came with a warning that they could come accompanied with the danger of a house price crash but does not mention the fact of the losses that would be made on Lifetime Mortgagees or even the fact that if the aforesaid did happen every household would affected.
Lets hope not.

Onlooker · 15 December 2017 at 5:37PM

Age Parnership has advertised with regard to Equity. Releases In said advert they say borrowings will be tax free but do not point out that they will be subject to Compounding Interest which will increase the amount due against your property to double what you have released I 12/13 years and tripled I about 25 years thus reducing the value of your estate by maybe 30/40% There will of course a Legal Charge against your property which will apart from your name on the deeds will reduce the 100% ownership you would have..No guarantee for or against house price inflation in future years can be made but you should at least obtain figures that you will owe in any future year.These can be provided to the penny.Consider

clairebeth · 16 December 2017 at 3:16PM

Yes it does. I just looked it up. Under the heading 'disadvantages' it mentions that your mortgage will increase as the interest accrues and rolls up into the loan. Just like any other mortgage and loan I've ever heard of. I know you're annoyed at yourself about this, but I just can't imagine why you didn't realise this would happen. What's done is done. Perhaps try and start being Pro active about this and pay the interest? Take a lodger, rent a room out on AirBnb, downsize, sell some things, overhaul your finances so that you are living on less, ask your family for help? There IS an answer, but only you can do it, we can't do it for you.

Downsizer · 19 December 2017 at 9:00PM

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?

Lifetime Mortgage

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