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  • FIRST POST
    • Onlooker
    • By Onlooker 23rd Jun 17, 3:15 PM
    • 89Posts
    • 18Thanks
    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 9
    • Onlooker
    • By Onlooker 19th Oct 18, 2:34 PM
    • 89 Posts
    • 18 Thanks
    Onlooker
    Lifetime Mortgage
    Two full centre pages this week with regard to getting involved in Equity Release.What is not shown is enough warning with regard to spending and borrowing in borrowers future.Using their own 78000 example take into account that whatever you may or not do with your monies .7 years later that will have cost you 50% more,and 14 years later no matter what it was used for repayment will double and carry on rising.In year 14 the added on interest will be 7354.00 on a 5% interest which is over 9%.and full repayment will be 154,434.00.Consider
    • Onlooker
    • By Onlooker 24th Oct 18, 3:36 PM
    • 89 Posts
    • 18 Thanks
    Onlooker
    Lifetime Mortgage
    Another full page advert in the press but this time completely lacking in any warnings in either big or small print in regard to what the adverse consequences will be to anyone signing up to a Lifetime Mortgage..Consider.
    • Onlooker
    • By Onlooker 27th Oct 18, 12:12 AM
    • 89 Posts
    • 18 Thanks
    Onlooker
    Lifetime Mortgage
    The papers are reporting the Financial Conduct Authority is taking a closer look at the Lifetime Mortgage marketplace and updates could take place.In one particular to protect the aged people who have little understanding of the consequences and are therefore vulnerable to making long term mistakes.
    The providers are been looked at as to not providing a better understanding of their future commitment.i.e.compounding interest,early repayment charges and the loss of inheritances to pass on to their decendents.Consider
    • Onlooker
    • By Onlooker 31st Oct 18, 1:11 PM
    • 89 Posts
    • 18 Thanks
    Onlooker
    Lifetime Mortgage
    One of the best alternatives to the consequences of involvement with a Lifetime Mortgage is downsizing ,usually dismissed by the providers.Compare the options .A 80,000 00 loan @ for example 5% compounding interest will in 1 year increase your debt to 84,000.After 5 years 102,102.00 after 10years 130.311.00 After 14 years 158,394;00 and continue rising through your lifetime.
    The initial costs of downsizing are usually used as a deterrant to do so.The case is the legal and setting up charges are much the same.The Stamp Duty due is the extra cost,a one off payment subject to what price you pay for your future property.If for one example you pay 280,000.00 for your new homemove the Stamp Duty incurred will be 4,000.00 a one off expense and it will be all yours..Compare and consider
    • Onlooker
    • By Onlooker 5th Nov 18, 2:53 PM
    • 89 Posts
    • 18 Thanks
    Onlooker
    Lifetime Mortgage
    12 months ago the Financial Conduct Authority stated it would not for the time being take any action,despite public complaints in regard to the selling of Lifetime Mortgages to people with a marked lack of understanding of the complexities of the product.
    As easy as ABC has got to be on its own the most misleading statement in advertising.The Equity Release industry should in its self publish truer facts and figures instead of the people mentioned having to meet with a salesman loaded with over 40 pages of complex information.
    Just how big and costly will the temptation of a free Hamper be.Maybe next Christmas a stuffed turkey as well.Consider
    • Onlooker
    • By Onlooker 9th Nov 18, 8:29 PM
    • 89 Posts
    • 18 Thanks
    Onlooker
    Lifetime Mortgage
    A Lifetime Mortgage could be viewed the other way.i.e A Mortgage for a Lifetime.After purchasing your home over a 20/30 year period with a closure date and all paid for .The option being offered is entering into a debt with no set period of time and at a cost which will increase on an annual basis to reduce the equity in your home by a very large amount and also reduce any inheritance to ones family.Examples can be given but no definative date can be given as to what period of time but you should get forward examples as to what the effect will be say on every 5 years in advance befor signing .Alternatives are to had =Consider
    • Blackbeard of Perranporth
    • By Blackbeard of Perranporth 10th Nov 18, 3:55 AM
    • 5,908 Posts
    • 34,346 Thanks
    Blackbeard of Perranporth
    OP. When you blew the 45,000 on t@ck, did you enjoy it?

    Otherwise, most are aware not to let the promise of some windfall affect their investment decisions!
    Cardiac Arrest - Electrical - Patient unconscious! Heart Attack - Plumbing - Patient conscious!
    Defibrillators Cannot Cure a Heart Attack!
    • RunningKatie
    • By RunningKatie 10th Nov 18, 10:05 AM
    • 17 Posts
    • 66 Thanks
    RunningKatie
    As the OP states there is an element of people needing to understand the product that they are purchasing, but that is down to the individual, the legal underwriters of each product must be sure that any individual purchasing this type of product is of sound mind, beyond that, they or the sales company have no responsibility to the individual. As it should be. If someone is deemed of sound mind then it is up to them to ask about the risks and forecasts and how that may affect family inheritance or any issues involved in selling the property to enter residential care. As many people are aware these are not a product to be taken lightly but if you do decide to take one, then you live with the consequences whatever they may be and have no reason to complain if you read you contract...
    As someone working in a legal department that handles this type of product along with other house sales (legal conveyancing) I maybe have less sympathy than some, but most people understand these products and the risk involved and if they had any concerns would speak to an IFA who can explain all options in detail. Do not take these products lightly, lifetime mortgages have changed slightly over the years with some providers now offering options to pay the interest off every month, but even with these there are costs to be considered, if the value of your property goes down, the company will still want the full amount repaid when it sells, not a percentage based on what you or your family could sell the property for.
    For those that truly understand the risks, these mortgages can be a viable option! But please make sure you understand one before you sign the contract!
    • Ffazniah
    • By Ffazniah 10th Nov 18, 1:36 PM
    • 1 Posts
    • 0 Thanks
    Ffazniah
    Worth considering
    I think that it is better regulated now. I have a family member who has just started looking into this. She could downsize, but estate agent and stamp duty and solicitors fees would cost around 20000 for downsizing to release about 95000 out of current property. She has had an illustration and to release the same amount through a lifetime mortgage at 4.14% a year fixed it would cost 3900 in interest in the first year. She is hoping to be able to pay it off within 6 to 10 years via an inheritance. In six years the amount owed would be around 121500 which would include 27000 of accumulated interest. She has a early redemption fee of about 3% which is 2840 So she would owe 30000 in accrued interest approximately. The point is she can stay in her present home, only paying around 10000 more than if she had downsized just to survive. Even if the inheritance did not come. Her property value would have increased by the time she dies that any heirs would still get a reasonable sum. She also has the option of repaying up to 10% a year of the initial borrowing, which would cover the interest and could repay some of the capital if she wanted. It seems to me like an excellent deal. Everyone can win if you can use the deal to work for your own situation. You just have to be so careful. Remember, yes it is nice to leave something to people, but at the end of the day, you have to live the rest of your live and enjoy it, if you are cash poor and asset rich, there is probably a compromise in there, but get advice.
    • Onlooker
    • By Onlooker 14th Nov 18, 2:19 PM
    • 89 Posts
    • 18 Thanks
    Onlooker
    Lifetime Mortgage
    Quote from financial pages.This Is Money Lifetime Mortgages are exceedingly complex and the penalties are way beyond the understanding of vast majority of the population.
    Also commenting in these pages someone said that the sales companies have no responsibility to the individual It is up to them to inquire about the risks and forecasts and the effect they will have on their future issues i.e. family inheritance and having to go into care.Consider
    • Onlooker
    • By Onlooker 18th Nov 18, 12:11 PM
    • 89 Posts
    • 18 Thanks
    Onlooker
    Lifetime Mrtgage
    Received a letter from one of the big advertisers in the Equity Release market asking if we would like to switch to a lower rate of compounding interest than we are paying now.Of course we would but then wonder at what cost?Will we have to settle what we owe now or just borrow more?Will we have to pay the early leaving penalty?Will they provide enough information so that we can work out how many years it would be before we saw any moneraty advantage to ourselves?Cant wait.
    • robatwork
    • By robatwork 19th Nov 18, 1:57 PM
    • 4,951 Posts
    • 5,699 Thanks
    robatwork
    These questions—and many others—will be answered in the next episode of...Soap.
    • Onlooker
    • By Onlooker 23rd Nov 18, 3:25 PM
    • 89 Posts
    • 18 Thanks
    Onlooker
    Lifetime Mortgage
    One of the best alternatives to getting involved in a lifetime of compounding debt is to downsize to a cheaper property.It is a repeat of our considered opinion usually dismissed as not the best of choices due to the initial costing.Stamp Duty being the biggest amount involved.The charges to be made are not as expensive as they seem.On a property costing 250000 the charge would be 2500 i.e 1%.On 300000 the charge due would be 5000 i.e 1.67% .On 350,000 the charge would be 7,500 i.e 2.14% On 400,000 the charge will be 10,000 i.e 2.5% These are the effective rates that you will pay as part of the downsizing finalising.Consider
    • robatwork
    • By robatwork 24th Nov 18, 10:52 AM
    • 4,951 Posts
    • 5,699 Thanks
    robatwork
    One of the best alternatives to getting involved in a lifetime of compounding debt is to downsize to a cheaper property.It is a repeat of our considered opinion usually dismissed as not the best of choices due to the initial costing.
    Originally posted by Onlooker
    Firstly it's not usually dismissed. Downsizing is usually the first suggestion of anyone on here, and any of the experts I hear espouse on the subject online, on radio and on TV.

    Secondly when did this become your considered opinion? Presumably sometime long after you took a loan against your equity?
    • sexymax
    • By sexymax 30th Nov 18, 2:46 PM
    • 25 Posts
    • 8 Thanks
    sexymax
    I am in the process of applying for a lifetime mortgage, however my ex partner (my childrens mother) whats to put a restriction on the title deeds.
    which ensures the property cannot be sold without the ok from my children.
    once this is done she agrees to remove her name from the deeds, allowing me to apply for equity release. any problems ??
    • ACG
    • By ACG 30th Nov 18, 2:53 PM
    • 18,514 Posts
    • 10,161 Thanks
    ACG
    Yes.
    A lender would not agree to that as your kids could effectively say no to the property being sold indefinitely. As there is a possibility the property could end up having no equity in the property, there would be no incentive for your kids to agree to sell it in that situation as they could theoretically live there rent/mortgage repayments free forever.

    Im not even sure a lender would want the hassle of negotiating an agreement that works for all parties, they could lend that money out to 100 other people instead.
    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 30th Nov 18, 10:12 PM
    • 89 Posts
    • 18 Thanks
    Onlooker
    Lifetime Mortgage
    Having looked again at the 38 pages of discussion and guidence we got from our I.M.A on behalf of one of the leading providers of Lifetime Mortgages we have found the one and only line refering to Downsizing.
    History has told us to not take it into account until many years later was a costly mistake.
    If only we had had a daughter who was a fully trained Independant Financial Advisor as claimed in the Equity Release pages who could have advised us as she did her own father towards Downsizing and as he states he is a happy that he did take her advice and opted not to enter into a Lifetime Mortgage Good for her.Consider .
    • Ibrahimovic786
    • By Ibrahimovic786 30th Nov 18, 10:14 PM
    • 28 Posts
    • 1 Thanks
    Ibrahimovic786
    Hi to all brokers
    I need a mortgage but it's very tricky my situation probs need best broker in uk lol
    Who is up for a challenge?
    Please get In touch
    • Ibrahimovic786
    • By Ibrahimovic786 30th Nov 18, 10:26 PM
    • 28 Posts
    • 1 Thanks
    Ibrahimovic786
    Acg
    could you help me getting a mortgage???
    • Onlooker
    • By Onlooker 6th Dec 18, 9:17 PM
    • 89 Posts
    • 18 Thanks
    Onlooker
    Lifetime Mortgage
    Bank accounts ,car insurance etc.energy costs standard mortgaging all have enticements to switch your provider to probably save monies and even get rewarded to do so.Not so the Lifetime Mortgage industry.Why not?.If for what ever reason you want or have to close your account early a penalty charge of around 25% of the original borrowings will be an addition to your outstanding debt.
    Best advice if you decide to enter is to wait at this time of total uncertaincy.The longer anyone waits in this next year of change could save a lot of monies for a lot of house owners.Consider
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