Lifetime Mortgage

( Reverse Mortgage )

A lifetime mortgage (known as reverse mortgage in the America) is a loan available to seniors (65 and over, but different lenders offer them at lower rates at younger ages)(62 and over in the US),

Used to release the home equity in the property as one lump sum or as multiple payments like a wage or self-pension (known as an income stream).

The loan doesn’t need to be repaid until the owner dies (at which time the property is sold), or the owner sells the property to move elsewhere. Often into care home.

With lifetime home mortgages, the home owner makes no payments and all interest is added to the mortgage balance. If the owner receives monthly payments, then the debt on the property increases each month. The amount available varies on circumstances according to the Loan-to-Value (LTV) ratio.

If a property has increased in value after a reverse mortgage is taken out, theoretically it’s possible to take out a second (or third) reverse mortgage over the increased equity in the home. But in certain countries (including the United States), a reverse mortgage must be the first and only mortgage on the property.

The regulation governing these loans is particularly strict in order to protect the elderly from unscrupulous brokers and salespeople.

Read again about Lifetime Mortgage options or more information on other mortgage types.

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