UK Pensioner mortgage (equity release) grill?
This question concerns money borrowed from the Nationwide building society.
My parents, who are now 73, took out what they thought be lb20 000 in equity release from the value of their house (worth presently about lb200 000 ) 7 years ago.
The amount of money "released" was lb20 000 which my parents basically pay the interest on each month (interest-only).
They also hold lb15000 in outstanding mortgage which is also interest-only.
The mortgage term on this lb15000 is within 2011/2012.
However they have also discovered that the lb20 000 has also get to be paid back by 2012 !
They know that 2011/2012 was when the lb15 000 had to be remunerated back but were lower than the impression that the lb20 000 did not have to be salaried back until their death.
Looking on Nationwide's website it say that they do not currently offer lifetime mortgages
http://www.nationwide.co.uk/search/DisplayArticle.aspx?article=1035
So this lead me to believe that the lb20 000 borrowed was just an "ordinary" interest-only mortgage near a fixed end date.
Do you think this is correct ?
Answers:
Yes I do, that's the problem near the interest-only mortgages is that your make the interst payments but eventually the balance of the mortgage comes due adjectives at once. My suggestion would be to refinance the property to get into a better situation with a fixed rate.
This will salary off the balance adjectives at once and there are 10 year loans available. Now or after the first of the year is a great time because interest rates are dropping significantly at this time.
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My parents, who are now 73, took out what they thought be lb20 000 in equity release from the value of their house (worth presently about lb200 000 ) 7 years ago.
The amount of money "released" was lb20 000 which my parents basically pay the interest on each month (interest-only).
They also hold lb15000 in outstanding mortgage which is also interest-only.
The mortgage term on this lb15000 is within 2011/2012.
However they have also discovered that the lb20 000 has also get to be paid back by 2012 !
They know that 2011/2012 was when the lb15 000 had to be remunerated back but were lower than the impression that the lb20 000 did not have to be salaried back until their death.
Looking on Nationwide's website it say that they do not currently offer lifetime mortgages
http://www.nationwide.co.uk/search/DisplayArticle.aspx?article=1035
So this lead me to believe that the lb20 000 borrowed was just an "ordinary" interest-only mortgage near a fixed end date.
Do you think this is correct ?
Answers:
Yes I do, that's the problem near the interest-only mortgages is that your make the interst payments but eventually the balance of the mortgage comes due adjectives at once. My suggestion would be to refinance the property to get into a better situation with a fixed rate.
This will salary off the balance adjectives at once and there are 10 year loans available. Now or after the first of the year is a great time because interest rates are dropping significantly at this time.
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