Where the problem is insufficient income to meet the lenders’ requirements there are now a
number of Lifetime Mortgage options where the borrowing is dependent on age and property value only.
The minimum age is 55 but where one spouse or partner is over 55 but the other is not, there still can be options. Many Lifetime Mortgage providers also can ignore credit problems such as arrears or defaults and even sometimes CCJs or even a historical bankruptcy. A survey carried out at the end of 2018 saw people using Lifetime Mortgages to raise funds for many different purposes including the following: 66% - home improvements; 34% - to go on holiday; 30% - to pay off debts; 27% -gifting to family or friends; 21% to clear an outstanding mortgage; 12% to help with regular bills.
Lifetime Mortgages now also allow monthly interest payments for some or all of the interest being charged so the interest does not have to be left to build up. The other alternative is to be able to make lump sum payments during the year without penalty – usually up to about 10% of the amount borrowed. The interest rates vary from provider to provider but generally depend on how much is being borrowed and the loan to value ratio. The best rates start at about 3.2% going up to about 6.0% for maximum borrowing. Here are some examples of how much could be borrowed:
The minimum age is 55 but where one spouse or partner is over 55 but the other is not, there still can be options. Many Lifetime Mortgage providers also can ignore credit problems such as arrears or defaults and even sometimes CCJs or even a historical bankruptcy. A survey carried out at the end of 2018 saw people using Lifetime Mortgages to raise funds for many different purposes including the following: 66% - home improvements; 34% - to go on holiday; 30% - to pay off debts; 27% -gifting to family or friends; 21% to clear an outstanding mortgage; 12% to help with regular bills.
Lifetime Mortgages now also allow monthly interest payments for some or all of the interest being charged so the interest does not have to be left to build up. The other alternative is to be able to make lump sum payments during the year without penalty – usually up to about 10% of the amount borrowed. The interest rates vary from provider to provider but generally depend on how much is being borrowed and the loan to value ratio. The best rates start at about 3.2% going up to about 6.0% for maximum borrowing. Here are some examples of how much could be borrowed:
(Note: These are approximate figures and assume a property value of £300,000)
Age 75 - £141,000 (47% of property value)
Age 70 - £135,000 (45% of property value)
Age 65 - £120,000 (40% of property value)
Age 60 - £98,800 (33% of property value)
Age 55 - £73,500 (25% of property value)
Taking all of these points into account, the bottom line is that if you are over 55, you may be able to borrow for any legal reason on an interest-only basis without having to meet any affordability requirements and regardless of credit difficulties. If you would like to find out what your options might be, just give us a ring.
Age 75 - £141,000 (47% of property value)
Age 70 - £135,000 (45% of property value)
Age 65 - £120,000 (40% of property value)
Age 60 - £98,800 (33% of property value)
Age 55 - £73,500 (25% of property value)
Taking all of these points into account, the bottom line is that if you are over 55, you may be able to borrow for any legal reason on an interest-only basis without having to meet any affordability requirements and regardless of credit difficulties. If you would like to find out what your options might be, just give us a ring.
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