Monday, 18 September 2017

Lifetime Mortgage Interest Rates

Most Lifetime Mortgage interest rates are fixed for the term of the mortgage. The rates currently range from about 3.68% upwards with the rate dependant on the percentage of borrowing and other scheme options. The maximum levels of borrowing shown in the previous example commonly come with higher rates of 5.55%. The lower rates are for lower percentage borrowing. While these rates are
much higher than the residential mortgage rates currently available, they are for potentially much longer terms and they are in line with the average mortgage interest rates over the past 10 years or so. There are also some variable rate options starting at 3.5% but these are increased in line with inflation (Consumer Price Index) each year.

Monday, 11 September 2017

Some More Details of the Lifetime Mortgage

Because of the potentially very long term of the mortgage, the maximum amounts that can be borrowed are generally less than you would be able to borrow with the usual residential mortgage. Here are examples of the maximum amount of borrowing possible based on age. (Note: in the case of a couple the age that the lender’s operate on is that of the younger of the two.)

Age      Loan To Value        Maximum borrowing on property worth £300,000

55          25.5%                           £76,500

60          31.0%                           £93,000

65          36.0%                           £108,000

70          41.1%                           £123,300

75          47.0%                           £141,000

80          51.5%                           £154,500

Note: These are examples only but do represent a reasonable estimate of the maximum borrowing possible at the ages shown. In the event that there are serious medical conditions a higher level of borrowing may be possible.

Monday, 4 September 2017

Looking Inside a Lifetime Mortgage

A Lifetime Mortgage is a mortgage like any other mortgage. You borrow money against the security of the property. You remain the owner of the property and benefit from any increases in the property value. You also remain responsible for keeping the property in a good condition. Usually the interest rate is fixed for the term of the mortgage which can be as long as you live or until you go into care.

You can pay off the mortgage at any time, although in the initial years there may well be early

repayment penalties – just as there are with most fixed rates with the usual residential mortgages. With a Lifetime Mortgage you can either choose to repay the interest being charged, or make no payments of interest – letting the interest build up and be repaid by the eventual sale of the property.

Thursday, 31 August 2017

Other Solutions - The Lifetime Mortgage – A New Flexible Mortgage Tool for the Older Generation

In many ways the new Lifetime Mortgages provide the sort of flexibility that was a feature of mortgage borrowing many years ago.

The level of borrowing is determined in most cases not by affordability calculations, but by just the borrower’s age and value of the property. The older you are and the more the property is worth, the more you can borrow.

This can provide an escape from an older interest-only mortgage arrangement. It can also open the door for using the value in the property for any other reason – whether it is for one’s own projects or to help family with problems they may have. The Lifetime Mortgage interest rates have also been inching downwards in the last few years as competition has increased. Past credit problems also usually do not present a barrier.

Monday, 21 August 2017

Mortgage Problems

As one gets older, one can hit various problems with mortgages. The older you get, usually the more difficult it is to take out a mortgage. One of the common problems we are often asked to assist with is interest-only mortgages – particularly those reaching the end of their term. Ultimately one can sell their property and downsize or go into rented accommodation, but as one gets older it becomes more and more undesirable to leave the home and area one has lived in for so long and which have become such an important part of their lives. Another option is to seek advice from an independent mortgage broker such as ourselves, as there are a number of niche lenders who provide special terms for older borrowers.

Monday, 14 August 2017

The Inertia Tax!

Those with residential mortgages that stay on their lenders’ Standard Variable Rate are effectively suffering a voluntary tax by not taking advantage of their lender’s special deals. Shifting over to the lender’s special deals, such as a fixed rate for two or three years, can save hundreds or even thousands of pounds over those couple of years. Simply contact your lender and ask them what is

available. This same principle applies for those who have buy-to-let mortgages on investment properties.

Monday, 7 August 2017

Pension Bits and Pieces

The older of us have often worked in many jobs and often with each job came some sort of pension arrangement.

When approaching age 55 or older, it is worth gathering all of these pieces and working out how you want to use them. Where such bits and pieces go back quite a ways in time, the Government can help you locate them through their free Pension Tracing Service(0345 600 2537). If you are not sure when your State Pension comes into effect, you can find out by searching “Check Your State Pension”, and for your State Pension Forecast search “Check Your State”.