A Lifetime Mortgage is an open ended mortgage with no specific term, full repayment of the loan occurs in the event of one of the following occurring:
• Death
• The borrower moves to live elsewhere i.e. residential care
• The borrower moves to another residence
• The borrower sells the property
• The lender exercises its legal right to take possession under the mortgage contract.
While the borrower occupies the property as a main residence, the arrangement can be on the basis that:-
• No regular payment of interest or capital is required, although interest can be charged and rolled up to be repaid at the end of the mortgage; or
• Payment of interest will be required but the capital is not repaid until the end of the mortgage; or
• Payment of interest and partial repayment of the capital may be required, but full repayment of the capital is not required until the end of the mortgage.
The majority of lifetime mortgages are on an interest roll up basis, although some are arranged on a straightforward interest only basis. This means that the younger the client the more interest is going to be paid over the lifetime of the mortgage as interest is being paid on the interest rolling up. Draw downs can be made which reduces this problem.
As clients get older larger LTV can be achieved, for example 25% LTV at age 60 and 50% LTV at age 89.
Min Val can range from 30k to 100k depending on provider with minimum age of 55 to 60.
Contact Solution Mortgages for more information on 0845 123 1260.