It is estimated that nearly 600,000 interest only mortgages will expire by 2020 and for many borrowers facing an outstanding balance, a lifetime mortgage could provide the solution.
Paying off an overdue interest only mortgage is one of the most popular reasons for people choosing to take a lifetime mortgage, as it can provide a sustainable way for older borrowers to settle their existing mortgage and remain in their home without putting undue stress on their cashflow. Here’s an example of how it can work.
We worked with clients who had a large estate but still had an interest only mortgage that was due to be repaid in full two years prior to speaking to us about a lifetime mortgage.
They wanted to use a lifetime mortgage to clear the debt and bring the rate down from the lender’s variable rate that they were currently pay. This was important due to the size of the outstanding loan, which was £650,000 and so monthly payments were very high.
There was an added complication as the property, which was originally valued at £1.75 million, was down valued. The reason for this down valuation was a foam spray that was used on the roof timbers, which stopped the valuer being able to inspect the timber and this could have potentially been enough to stop the deal from progressing.
However, we were able source the manufacturer of the foam, and obtain a full report relating to the work carried out on the roof when the foam was applied. This report provided the necessary evidence to prove that the foam benefitted the property, rather than detracting from its value and, as a result, the valuation was changed, and the mortgage was offered.
Not every case is this large or indeed this complicated, but lifetime mortgages can be used on large complex deals as well as more standard cases. If you would like to discuss the lifetime mortgage options available to your clients, ENQUIRE TODAY
FOR INTERMEDIARY USE ONLY AND NOT INTENDED FOR THE GENERAL PUBLIC