CASE STUDY SEVEN - REPLACE YOUR CURRENT MORTGAGE

The mortgage market has become very turbulent indeed since the announcements from the “mini budget” and as inflation races away, we have seen interest rates climb to their highest levels for many, many years. When you add this to the to the increasing costs of gas, electricity and fuel, it makes for a bleak picture for many people who were “just fine” before.

 

All of this turmoil has led and will lead to millions of people needing help with their situation as many mortgages come to an end and many more become simply unaffordable. If this is the situation that you or your loved one find themselves in, then don’t worry as we could help you now and in your future.

 

In the right circumstances we switch your mortgage from a conventional lender to a Lifetime Mortgage lender and this can give great peace of mind and can free up much needed income.

 

If your mortgage has come to an end and you do not want to move, then we can help by offering an open-ended mortgage where you can choose your payments, and in some circumstances clients choose to pay nothing at all and let the interest “roll-up” onto the loan. Thanks to Viva’s work with the Equity Release Council all plans must offer the ability to make repayments and this can be whatever you want. Absolutely the interest rates in our market have increased, but you can first of all fix an interest rate for life (to give you certainty) and choose if you want to make any kind of payments against this.

 

We will always recommend that you repay as much interest as you can, but the great thing is, this is totally your choice!!

 

It could also be that family members, like children are in the position of struggling with the costs of living and again we can help you to help them at a time when it may be needed most!!

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George and Linda, 67 and 69, were at their wits end before they spoke with Viva. They had been loyal clients of a major high street bank for over 20 years, but were now being told that they could not extend their current mortgage at all. Not only were they told this, but they were actually told that they need to repay their Interest Only mortgage within a few months or face the dire consequences of repossession.

 

George and Linda could not understand why after having a mortgage with the lender for so long, and not missing a single repayment, they were being treated like this.

 

Viva explained that many, many people find themselves in the same position and that it is their age and income which stops them from being able to prove the affordability that is needed to carry on with a conventional mortgage.

 

We asked the clients to look at other lenders in the 1st instance and then decide if they would prefer to downsize or stay where they are.

 

Their property value had risen over time to £300,000 and they owed £100,000 now, but did not want to move home at all.

 

Being retired they simply could not pass the stress test of affordability after first death and so could not get a mortgage anywhere, even though their income was pretty good!

 

They said “We are just not ready to down-size and do not want to move away from the family home where we have lived for many years. We have friends and everything that we need is on the doorstep, not to mention that we love having the space to have the grandkids over.”

 

After assessing the situation and the fact that George and Linda wanted to carry on making Interest Only payments, we were able to discuss the possibility of Retirement Interest Only (RIO) and Lifetime Mortgages with them in the comfort of their own home.

 

After the initial meeting, it became apparent that a RIO mortgage was not achievable and so we recommended a specific plan that would allow George and Linda to re-finance to a Lifetime Mortgage where they will never harassed that the mortgage has come to the end of its term again! They carried on with their Interest Only payments and actually received a discount to the interest rate for the whole period that they would be happy to make interest payments.

 

George and Linda were in despair before contacting Viva and thought that they would be forced to sell their family home, in order to pay off the lender, and then have to buy a property in a different area.

 

This new mortgage gave George and Linda the peace of mind that they can stay in their home until they are ready to downsize, if this ever happens. If this does happen, they can simply take the new mortgage with them if they wish and if the new property passes the eligibility criteria set by the lender. This is usually checking that the new property is not in a flood risk area and is made of standard contruction.

 

If this sounds familiar, please do get in contact and we will advise you if a Lifetime Mortgage would be suitable or not.