Borrowers need to instruct and meet with a solicitor on issue of their lifetime mortgage offer or equity release offer.
Lifetime mortgage lenders insist on a solicitor rather than a conveyancer. This is due to the higher risk and to ensure that appropriate advice and expertise are employed.
This type of mortgage will reduce equity in your home and that will affect your family on your passing. Relatives will inherit less and may struggle to cover your funeral costs. As a result they may take legal action. So there is a higher risk for the acting law firm.
To ensure you fully appreciate and understand the risks an in-person meeting, or video call, will be necessary and will form part of your lender's requirements. On occasion home visits can be arranged but these are chargeable per visit.
What Is A Lifetime Mortgage?
This is a special type of Loan designed to run for the rest of your life and means that you borrow money that is secured on the Home to give you a lump sum or regular income. The amount owed to the Lender is paid back from the proceeds of sale of the Home after your death. Only monies left over would be paid back to your beneficiaries under your Will.
Once the Mortgage is entered into and the funds are released,there is no right of withdrawal. You will have a right to repay the Mortgage as per the Terms & Conditions of the Mortgage offer.
You should read all the documentation sent to you by the Lender including the Key Facts Illustration and, their Terms & Conditions. It is important to thoroughly consider the Features, Implications and Terms & Conditions of the Mortgage offer.
You will retain the ownership of your Property and will be entitled to live in the Property for as long as you wish.
You must agree to the Property being your main place of residence and you may not allow any other persons to live there without the prior written consent of the Lender (or their successors).
The Lender has the right to take legal action to repossess the Home in the following circumstances:
a) Property not being sold within 12 months of your padsing (or if joint borrowers, of the death of the last borrower) or your entering long-term care (or the last borrower entering long-term care) or otherwise vacating the Property.
b) You become bankrupt.
c) You cease to occupy the Property as your main residence for 3 months or more without the Lender’s permission.
d) Any failure to notify and co-operate with the Lender in relation to an environmental notice issued under Government Legislation relating to the Property (your Home) or a neighbouring Property.
e) You gave the Lender false, incomplete, or misleading information when you applied for the Lifetime Mortgage product including fraud or money laundering and the Lenderreasonably believes this made a significant different to their decision to lend to you.
f) If the Property is subject to a Compulsory Purchase Order or requisition – made by the Government or Council which requires you to transfer the Property ownership to them.
g) You breach the Mortgage/Loan terms and conditions.
Taking out this Mortgage may affect your ability to claim Social Security benefits and may affect your Tax Position. Conveyancers are not experts regarding that and cannot advise on the same. That is outside of our area of expertise. Tax and benefits can change over time and if you are concerned about the same you should contact HMRC (the Revenue), The Pension Service, The Benefits Agency, and your local Citizens Advice Bureau.
You MUST maintain the buildings insurance on the Property and this MUST be adequate to cover the cost of rebuilding the Property. You MUST note the Lender interest on the insurance policy schedule.
it will be a mortgage condition that you MUST NOT breach the terms set out in your property's Title Deeds for example, any restrictive covenants (conditions you must adhere to), or rights granted, or rights reserved to others as outlined in your Deeds.
NB: The value of your Property may change over time. This could increase or decrease. Your Conveyancer cannot give any guarantees regarding the same. .