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Using a lifetime mortgage to complete a clients bucket list

A later life lending case study

Objective

Our clients were keen to enjoy their retirement by drawing some of the equity in their property by way of a lifetime mortgage.  This would allow them to improve their current lifestyle standard and enjoy ticking things off their bucket list.

Obstacle

A friend had gifted them funds to help acquire the property and holds a charge that is noted on the land registry. The charge doesn’t bear any interest or need to be repaid until death or sale of the property.

Outcome

All lenders stated that they required the charge to be cleared.  An additional £100,000 would have needed to be raised meaning that the gifted equity would become interest bearing.

 

Sentry Lifetime managed to work with a lender and obtain the funds for the clients by arranging for a change of priority for the current charge.  The lifetime mortgage charge was therefore number one and the gifted equity now as a second charge.  This also meant that the clients would continue to pay no interest on the gifted equity.

 

The clients received a lump sum upfront, followed by an additional reserve of funds that can be drawn down when needed whereby the interest is only charged on funds that have been drawn down.

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