‘Gifting before the budget’ by Paula Steele published in IFA Magazine
Many clients are concerned that there may be changes to capital gains tax and Inheritance tax in the Budget on [...]
Re-mortgaging a lifetime mortgage to a cheaper rate
A man in his 70s and a woman in her 60s with a property worth £4 million. Their existing lifetime mortgage of £1.6 million had a relatively high interest rate of just above 7%, which meant that the amount owing was increasing rapidly. The couple were concerned about the loss of equity from their property.
Elderly client obtains a lifetime mortgage to pay for care costs
A man aged in his 80s with a property worth £750,000 and a mortgage for £150,000 secured against it. The client had minimal income, but because of his care needs, he was spending £22,000 per year on his care (while remaining in the property) and on the costs of running the home. His savings were being rapidly depleted by these ongoing costs, even though his family were providing financial assistance. Another brokerage firm had already said that it could not assist him, and he was increasingly worried that he would be forced to leave his home.
Lifetime mortgage for consolidation of debts and home improvements
A single woman in her 60s with a property valued at £400,000. The client had £25,000 in credit card and loan debt. It was costing her £600 per month to repay these debts, so this was having an impact on day-to-day living, even though her monthly income was £1,800. She also wanted to carry out some home improvements but had no savings and was unable to obtain further credit due to her impaired credit history.
Re-mortgaging a lifetime mortgage to a more beneficial arrangement
A recently widowed man in his 80s. His existing lifetime mortgage had an interest rate above 6% and there was no facility to make fee-free repayments due to being an older product, which was far from an ideal arrangement. He was also due to inherit a large cash lump sum and wanted to use some of this to reduce the debt secured against his property
Assisting a client who was in difficulty due to a lack of income
A retired woman in her late 70s, finding that her income was not sufficient to cover her outgoings. Client’s financial difficulties had led to her accumulating debts and experiencing stress and illness. Friends and neighbours had been providing financial support as the situation worsened as she had no longer had any family.
Re-mortgaging from an interest only mortgage to a lifetime mortgage
A married couple in their early 70s, who had recently retired after selling their business. Their interest-only mortgage would shortly come to an end. Although they now had large savings and individual pension funds, they did not have sufficient regular income to meet the affordability requirements needed for a standard residential mortgage.
