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Elderly client obtains a lifetime mortgage to pay for care costs

  • Client required regular care in his home, but was being forced to dip into his savings to pay for this and family members were also having to help out
  • The recommended lifetime mortgage paid off his existing mortgage and allowed him to access sufficient income – via a drawdown facility – to pay his care costs and other bills

Client’s circumstances

A man aged in his 80s with a property worth £750,000 and a mortgage for £150,000 secured against it.

Issues addressed

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.

Tailored solution provided by John Lamb Hill Oldridge

Due to our knowledge of the market we were able to source a lender that would accept our client’s property. Our recommendation was for a lifetime mortgage that provided enough to pay off the existing mortgage and repay the funds lent to him by family members in the past.

The lifetime mortgage had a drawdown facility so he was able to access income of up to £22,000 per year for at least 10 years, enabling him to meet his care costs and the costs of running the home.

Although the client’s health situation was such that he was unlikely to live for 10 years, this recommendation provided him with the peace of mind that his bills would be taken care of were he to live that long.

The drawdown facility arranged allows for minimum withdrawals of £2,000 at a time. This was important as we needed to ensure that the client had minimal savings in his accounts otherwise this could impact on the financial support provided by the local authority.

It is essential that we understand our clients’ circumstances when arranging a lifetime mortgage as releasing capital from your property can impact on other factors such as finance support for care or means tested benefits, such as pension credit.

This is an example of how a lifetime mortgage can be used to pay for care costs and other ongoing bills, and how a lifetime mortgage can be set up with a drawdown facility which allows a client to access additional income. The case also illustrates how John Lamb Hill Oldridge can assist clients who have been declined by other brokers.

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Elderly client obtains a lifetime mortgage to pay for care costs

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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

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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.