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  1. #1

    Lifetime mortgages?

    what is the general opinion on lifetime mortgages?

    One of my good friend's parent's mortgage is maturing next month, and after the poor endowment they set up at the purchase of the property they are left with a gap of 60 k.

    His mum and dad both have retired and due to their age and income a re-mortgage is not possible and my friend has just been turned down from a number of companies due to not having a credit history.

    After a little research on the topic I came across these Life time mortgages, If anyone knows anything about these type of mortgages or maybe have another solution please let me know.

    Many thanks

  2. #2
    If you service the interest each month the only difference is that it is for a life time as opposed to a fixed repayment date. Get a fixed rate of interest as well.
    Can repay 10% of the capital each year if you desire.

  3. #3
    Funnily enough just signed up this morning. Do your research though as with anything financial caviat emptor.

    Main thing to look at is what rate you would get given your circumstances. Run that through a compound interest calculator, in my case for 33 years cause I am going to live to be 100, and see how that is going to look in terms of estate to pass on. I didn't assume house value increase and it is still less than 50% of current value.

    Also need to scrutinise costs. Some companies are more transparent than others some add charges for everything. Some charge for early repayment some add a residual drawdown charged at current rate when drawn and some then add charges for the paperwork for this. They charge for house valuation and solicitors fees and their own paper work all of which gets deducted from your advance.
    The company I used does not charge these fees although that will be reflected in the fixed interest rate and have just reduced their paper work cost from 600 to 5. So the only deduction I get from the total is 5.

    Plus if you take out one of these LTM's it reduces your estate by the then current value of your outstanding mortgage.

  4. #4
    PS go to the companies direct and they will pass you onto their agents.
    If you use the online companies you dont know who you are dealing with. Thats not to denigrate the online companies but if I am going down this route I want to see someone face to face not answer loads of questions over the phone.

  5. #5
    Thanks guys a lot to process I will pass on the info to my pal.

    Hopefully it's not to late to save the property as I spoke to him today and it was up this month.

    Maybe they will offer a grace period, it with Leeds and holbeck so probably not as I have dealt with those animals before.

    Thanks again guys God bless and have a great weekend and a smashing bank holiday.


 

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