When Mrs C approached us to review her financial arrangements, she was concerned about ‘making ends meet’. She faced a shortfall of about £30,000 per annum in her income and her disposable assets had run out. Mrs C had already released equity in the form of a lifetime mortgage of £500,000 secured against the family home, which was estimated to be worth £1.5m, but the existing lifetime mortgage could not be extended. In situations where there is an elderly client, even if they do have full mental capacity, we would always recommend that they involve a member of their family, or a close friend who they can trust, to support them through the decision making process and be there to offer a second opinion.
Mrs C’s son joined his mother at the meetings with Chris West, who discussed the options available to help them find the additional income required. In this case, because the original lender was unable to lend anymore, additional equity was released using a replacement life time mortgage taken out for £800,000 secured against Mrs C’s home. Unfortunately, there were early repayment charges paid to the original lender, which Chris included in the calculations for the replacement lifetime mortgage.
The result was well worth it, as Mrs C had the peace of mind that she could pay her annual expenses for the rest of her life and that she could keep on running her beloved art class. Her family were kept in the picture throughout, so they were able to give Mrs C the support she needed. Their involvement also meant they too had the reassurance that the right outcome had been achieved, which was ensuring that Mrs C could keep on doing what mattered most to her, without the burden of worrying about her finances.
This case study, about a lifetime mortgage / home reversion plan, is designed to aid discussion and should not be taken as a recommendation of any particular product or route. To understand the features and risks, please ask for a personalised illustration. No action should be taken without first seeking advice from a suitably qualified adviser.