f you think that a taken from the house’s value.
mortgage is beyond you
because even with a term of Flexibility with money
25 years the payments are too
high, then maybe you should One of the primary advantages of
consider getting a lifetime loan. a lifetime loan is that it allows
These loans are literally for you flexibility to pay back your
life, unless you pay them off mortgage. If you can afford to
before your death. They allow you pay back large amounts at some
to get property that you might point, then you can do so.
otherwise struggle to finance, However, if you do not wish to
whilst keeping your monthly pay back more than the minimum
payments low. Although they have amount you do not have to. This
some benefits, there are risks allows you to be flexible with
involved too. If you are your spending, and can help you
unfamiliar with lifetime loans, to maintain a good level of cash
then here are some facts about flow throughout your life. This
their problems and advantages. is especially useful when you are
older and do not have a large
What is a lifetime loan? regular income.
A lifetime loan is just like it Costs of a lifetime loan
sounds; a mortgage loan that you
can use indefinitely without In general, lifetime loans have
paying back regular payments. You similar rates to other mortgages,
take out the mortgage and then with rates between 6 and 8%.
pay back a minimal amount each Although you can probably find a
month. If the mortgage is not cheaper rate with a traditional
fully paid by the time you are repayment mortgage, the rates for
dead, then the remaining money is lifetime loans are very good
considering the flexibility they
offer you. Paying after death
Drawdown facilities The biggest problem with lifetime
loans is that you end up leaving
Another advantage of lifetime your debt to someone else. In the
loans is the ability to borrow worst-case scenario, your house
more money at a later stage of price reduces, meaning your
the loan. Once you have paid back relatives are left with debt even
some of the equity into your after the house is sold to pay
home, or your house price off the mortgage. Although it
increases, you can withdraw more leaves you flexibility, unless
money. This allows you to get a you pay off your mortgage your
cheaper loan than you would relatives will be left with
normally, and can save you little in the way of inheritance,
payments on credit cards and and may even inherit your debt.
other loans. Some lifetime loans Lifetime loans can be a great in
only allow you to borrow more terms of flexibility, but if you
money in the first ten years, want to leave something for your
although more and more are relatives you either have to pay
allowing people to withdraw more off the mortgage when you can or
funds at any time, as long as you need to find a different type
they have the equity in their of mortgage loan.
home to do it.
About the Author:
Peter Kenny is a writer for The Thrifty Scot Please visit us at Homeowner Loans and Bad Credit Remortgages
Read more articles by:
Peter Kenny
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