Clearing an interest-only mortgage
Nigel and Jenny have lived in their beautiful cottage for nearly 20 years. They had an interest-only mortgage, but as the end of the loan term approached, they still had a substantial amount of the mortgage to repay.
It looked like they would have to sell their family home to repay the outstanding mortgage, which would have meant relocating and downsizing to a smaller home. It was something that caused sleepless nights and worry for them both.
But then they found out about lifetime mortgages. They sought advice from a lifetime mortgage adviser, and discussed it with their family before deciding that taking out a Legal & General Lifetime Mortgage would provide them with an alternative solution to their problem.
Their Legal & General Lifetime Mortgage has enabled them to repay their outstanding interest only mortgage completely and allowed them to continue living in the home and location that they love, surrounded by friends and family.
In Jenny’s words: “Since we have the lifetime mortgage we feel relaxed. We are not worried anymore, we feel safe.”
Transcript: Nigel and Jenny clearing interest-only mortgage
Nigel: I’ve lived in this beautiful Cottage with my wife Jenny for close on twenty years now. Jenny has her workroom at one end and I have my office at the other where I sit and write scripts and books and…produce films from.
We hadn’t done an awful lot to sort our future out, we had an interest only mortgage and there was a large amount of money owing. As for savings we didn’t have any.
Jenny: We wanted more than anything to be allowed to stay here without any worry.
Nigel: I first read about the lifetime mortgages in a newspaper and I thought hello!...
On screen text: A lifetime mortgage creates a debt on your home. You should consider other ways to borrow which might be more cost effective.
You can only get a lifetime mortgage through a specialist adviser.
Nigel: ...this looks interesting, so I went online and did a bit more research…and contacted an adviser who could take us through the process and link us up with Legal & General.
There was a concern which was how would our children feel about this. They were immediately on our side…
On screen text: A lifetime mortgage will reduce an inheritance. If you gift the money away, the recipient might have to pay inheritance tax in the future.
Nigel: … they felt that that would be ideal, a weight off their minds, a weight off our mind, and they said “go for it Dad, go for it Mum”.
Everyone was very supportive, knowledgeable, clear and took us through the process in a nice, easy smooth way.
Jenny: And since our children are so happy about it, it feels that we don’t have to worry about anything anymore.
On screen text: The property must be maintained in good repair and condition.
Nigel: Used to wake up in the morning with this terrible gloom thinking where am I going to put my books? Where am I going to put my files? What about all this lovely furniture? It was…I couldn’t deal with it, it really was doing me in.
Jenny: Anyway, what he does now...ehh, when he gets worried or anything like that he reads the letter from Legal & General...(ehh your firm)
Nigel: I do I keep it in my desk and I get up in the morning and I read the first line of the three paragraphs and go Wow, Wooow, this is so… wonderful!
Jenny: Since we have the lifetime mortgage we feel relaxed. We are not worried anymore, we feel safe.
Nigel: It’s a lovely thing.
On screen text: A lifetime mortgage, a loan secured against your home, lets you take money from the value of your home without having to move.
Before you can take out a lifetime mortgage, you’ll need to speak to an adviser to discuss your options and the implications for you.
For example, we charge interest on the loan plus any interest already owing.
This means the amount owed grows quickly, leaving you with less equity in your property and reducing any inheritance.
It could also affect any state benefits you receive.
A lifetime mortgage is a loan secured against your client's home. Unlike a traditional mortgage, they don’t have to make any monthly payments. They should consider other ways to borrow money which might be more cost effective. The loan is repaid from the sale of their home when the last surviving applicant dies or moves into long term care.
It’s important to know that we charge interest on the total loan plus any interest already charged. That means the amount your client owes grows quickly, and reduces the equity left in their property and the value of any inheritance. It could also affect any entitlement to State Benefits.
The property must be maintained in good repair and condition.
You may wish to use customer testimonials when meeting with your clients to help them see how our Lifetime Mortgage have helped others.