OVER 60'S MONEY
OVER 60'S MONEY IS THE NAME GIVEN BY LANGTONS TO THE NEW LIFETIME MORTGAGE SCHEME PROVIDED IN SPAIN VIA A UK BUILDIING SOCIETY, A LONG ESTABLISHED MUTUTAL SOCIETY OWNED BY ITS CUSTOMERS. IN CASE YOU ARE STILL NONE THE WISER, LET ME EXPLAIN WHAT IS MEANT BY A LIFETIME MORTGAGE, A VERY COMMON AND POPULAR SCHEME IN UK BUT WHICH HAS ONLY RECENTLY BECOME AVAILABLE IN SPAIN.
Until now Equity Release in Spain meant borrowing on your property and then reinvesting all or most of the money borrowed, in the hope it would provide a higher rate of return than the loan interest rate. The lender takes a charge on both your property and the investment, so cannot lose! In current market conditions to achieve an investment return above that of the loan interest rate is far from certain, and hence these schemes can lead the customer into bad debts, and in the worse case scenario losing their home. This Lifetime Mortgage on the other hand is a way of unlocking some of the value built up in your home, without you having to move. Furthermore you can do what you like with the money, you don't have to invest it unless you wish to.
You have no mortgage payments during your lifetime, as the interest accumulates on the loan, and is repaid when you die from the sale proceeds of your property. If you have a partner it is only repaid on second death, or of course if you permanently leave the property first. Due to the fact the Lifetime Mortgage is a debt to your estate which notionally reduces the value of your property on death, it can also reduce Spanish & UK Inheritance taxes which may otherwise be payable by your dependants. The latter may therefore be no worse off financially due to you taking out this Lifetime Mortgage. This can be another good reason to take out a Lifetime Mortgage in Spain although this is a lifetime mortgage and should not be taken out without serious consideration of all your options.
This particular scheme benefits from a No Negative Equity Guarantee which means that in the event of your home being sold for less than the value of your mortgage and the interest owed, you or your beneficiaries will not be required to make up the shortfall. The loan will be at an interest rate which is fixed for the lifetime of the loan which takes away the worry of the affect of any future rate increases.
The amount you can borrow will depend on you and your partner's ages. The table below sets out the loan available as a percentage of your property value. If you have an existing mortgage of any type, then this will need to be repaid from these loan proceeds.
Contact us for more details on how this scheme can work for you!