A lifetime mortgage is when the landlord takes out a mortgage on their home. The mortgage provider will deposit a huge sum or a monthly income or may do a combination of both. Right the way through the mortgage term, the lender will go on to add the interest owed to the capital sum, which has been lent. Once the landlord has suffered death, the property will be sold and the mortgage provider will retrieve what is owed to them, any capital or interest from the auction of the sale.
The amount which can be borrowed depends on the age of the borrower and what the value of the property remains. A golden rule, the older the borrower, the bigger the amount that a mortgage provider will press forward, even though they are not likely to lend more than 50 percent of the value of the property under any reason.
Lifetime Mortgages advantages
- as a landlord you are likely to receive a larger income from a lifetime mortgage than a home income plan or an interest only mortgage.
- You as a landlord may decide to go with a fixed rate mortgage deal, here you will be able to estimate the total liabilities more precisely and budget consequently.
-People aged 55 onwards are liable to a lifetime mortgage deal.
Lifetime Mortgages disadvantages
- if you are a landlord then you will not know how much equity is left within the property until it is sold and the mortgage is finally redeemed.
- As whole interest money, which is owed, continues to accumulate, particularly if interest rates are far above the ground, you as a landlord could be left with something or nothing, yet if the mortgage was for a comparatively small proportion of the property's value when it was occupied.
- Comparison to different types of equity release schemes, a property owner with a lifetime mortgage would be improbable to the option of getting a further loan in the prospect.
Lifetime mortgages overview
- If you are considering a life time mortgage the interest owed to a capital balance is paid off when the property is sold, after the death of the owner;
- a landlord could potentially receive a larger income from a lifetime mortgage than from any other types of equity release products;
- landlords heirs could be left with nothing as a consequence of a lifetime mortgage if decided to take this type of deal further.
Please visit our Equity Release Mortgage section or for a Mortgage Quote visit http://www.mortgagequotes.me.uk
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