My grandad completely forgot he took out a lifetime mortgage

hobbitum · 2024-11-08T14:45:45+00:00

A few hours ago I didn't even know what a lifetime mortgage was and wish I didn't now! My grandad is 90 and thought he had paid off his mortgage. He was getting annual statements that he was putting to one side and not looking at properly thinking they were just a formality. He was informed this week a new provider was taking it over and his friend saw the letter and realised what has happened. He has made no repayments or paid off any interest for who knows how long. My grandad doesn't remember taking this remortgage out and it now looks as if it will take his home and every penny of his when he's gone. The more I find out the more I'm worried there is no recourse and his own awful mistake. He's devastated, completely shocked and feels a failure - I think this will seriously affect his health which is my main concern. He is of sound mind. I don't know why I'm posting here to be honest - surely mortgage lenders should be checking in on customers like this and doing a bit more than just sending standard letters and waiting to take everything when you die? I just don't know how he could have got himself into this situation. What on Earth can I do to help?

redskydarknight · 13/08/2025 10:17

PurpleChrayn · 13/08/2025 08:41

What? But this isn’t the case at all?

Dreadful, misguided advice.

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I have no idea why this zombie thread has been resurrected and I'm not re-reading the whole of it.

But I have no idea why this is "dreadful, misguided advice". There is nothing that can be done now about what happened in the past. Would it be better for OP to tell her grandad that he is a total idiot, and has ruined her life by his actions as she was relying on the inheritance, with the knock on impact on his health she seems to think this will cause?
Depends whether OP really just is a money grabber or actually cares about her relative.

Twiglets1 · 13/08/2025 08:57

PinkSparklyPussyCat · 13/08/2025 08:38

To your knowledge, they didn’t even discuss the equity release with those that it potentially affected re future inheritance.

No one is entitled to inheritance. I had to be made aware when DM did her equity release as I still lived there at the time but if I hadn't she didn't have to tell me.

No your mother wouldn’t have been forced to tell you.

But these days it is a requirement of the professional advice that people get when considering equity release schemes that they are strongly advised to inform all relevant parties (mainly your children who could reasonably assume they may inherit the house one day if it’s not sold to pay for care home fees).

PurpleChrayn · 13/08/2025 08:41

redskydarknight · 08/11/2024 14:52

You and other family members need to reassure him that this is perfectly ok and you wanted him to be able to enjoy his retirement years without money worries.

What? But this isn’t the case at all?

Dreadful, misguided advice.

PinkSparklyPussyCat · 13/08/2025 08:38

To your knowledge, they didn’t even discuss the equity release with those that it potentially affected re future inheritance.

No one is entitled to inheritance. I had to be made aware when DM did her equity release as I still lived there at the time but if I hadn't she didn't have to tell me.

Twiglets1 · 13/08/2025 07:29

I don’t really understand this.

He was in sound mind at the time he took out the equity release and signed the forms willingly. At the time they probably wanted extra cash for holidays, maybe a new car etc - these things he has now forgotten.

He then at some point stopped opening letters that came from the company. He wouldn’t have forgotten the equity release if he had never made the decision to stop opening the letters. Maybe they became uncomfortable for him to see.

To your knowledge, they didn’t even discuss the equity release with those that it potentially affected re future inheritance.

Sorry but your grandparents did a thing that was selfish according to some viewpoints ( others will say it was up to them). I wouldn’t feel that sorry for him shedding a few tears over it now, personally. Seems like he got over his upset, anyway.

Crikeyalmighty · 11/08/2025 09:48

There are nowadays all kinds of different products including ones where you pay the interest . So if someone has an ok pension but no access to lump sums, they can opt for a lump sum to maybe do a bit of renovation to keep the place nice or adapt , be able to go on holiday every year , give a helping hand to an adult child or grandchild and pay £200 to £600 a month interest depending on what they took out ( I’ve allowed for anything between £30 k and £100k on those figures) - there are ones where you have a ‘pot’ allocated- so just draw down on it like a private pension and only pay interest on what you’ve used or don’t pay interest at all, but it gets added on and obviously compound interest - I think if you are 72 plus and have a lot of equity it can work well but far too many use it early 60s to retire early, go mad and use it all up like it’s lottery win and then end up with no equity at all later in old age and then say it’s an awful scheme - or their family do who were expecting to inherit. .

PinkSparklyPussyCat · 11/08/2025 09:31

EmotionalBlackmail · 05/08/2025 22:06

It sounds like it worked well for her, but what happens if the person becomes too frail to manage at home? Mine chose to go into residential care from a pleasant bungalow with wetroom and without any personal care needs because shopping was becoming a struggle, freezer meals weren’t great, home maintenance was getting beyond her ability to organise and she was terrified of security and being scammed as lived alone.

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She'd have had to sell the house and use her half of the equity for care home fees until it ran out. I don't know if the sort of equity release Mum did is still available, she had a fixed sum in return for 50% of the equity when the house was sold.

Mum was only 67 when Dad died and it really was the best/only option for her at the time. She had a 2 bed semi so not much room for downsizing and if she'd gone to a retirement flat she'd have had to give up her pets and her garden. It was also the home she'd lived in since she married my Dad. I always said she'd be there until they carried her out and she literally was.

waxymoron · 07/08/2025 17:26

It was me who revived it!! The negative equity clause is really important as mostly there will be a difference between house value and what's 'owed' and I think (not an expert, just what I've read) these started maybe 20?years ago, so it could be that he has that.

Original poster

hobbitum · 07/08/2025 10:58

As this thread has been revived (with some more useful info, thanks pps), I can update but haven’t got very far really.

The LPA I had in place was a joint one with an uncontactable family member - tried to remove them - wasn’t allowed - had to start all over again with a new one. That all took a long time, and with other things to focus on I haven’t picked this up again yet.

My main concern now is checking this is covered by the negative equity guarantee to see if the lender will take anything else from him (or by extension me) but the flat. If we can draw a line under it there, that would be the ideal.

His annual mortgage statement dropped recently with another £10k or so increasing the absurd amount of negative equity he is in - more than the cost of the flat now.

On principle it is worth trying to establish if it was mis-sold - the lifetime mortgage was taken out by both my grandparents when they were in sound mind and actually running a business, well before retirement - there’s no way this was the right product for them if they needed a loan, and the paperwork showed the future value of their flat was grossly overestimated to get it over the line. It looks dodgy to me, but the time and effort to trace something so far back (25 years or so), when brokers/ lawyers whatever are dead or long retired, seems a slog. I don’t know who could actually be held accountable after all this time.

As for my concerns about my grandad’s mental health, he’s getting forgetful these days and it’s not something that has really stayed at the forefront of his mind, he certainly hasn’t got upset about it again following the initial shock. He’s got a home and hopefully all we’ll have to do is just let them have it when he’s gone and that will be the end of it. Sorry this got long!

OP posts:

Crikeyalmighty · 06/08/2025 17:43

@BunnyRuddington that’s the worst of all worlds!!

BunnyRuddington · 06/08/2025 15:10

EmotionalBlackmail · 05/08/2025 22:06

It sounds like it worked well for her, but what happens if the person becomes too frail to manage at home? Mine chose to go into residential care from a pleasant bungalow with wetroom and without any personal care needs because shopping was becoming a struggle, freezer meals weren’t great, home maintenance was getting beyond her ability to organise and she was terrified of security and being scammed as lived alone.

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My DM is in a similar position but has no equity.

She doesn’t meet the criteria for Social Care and doesn’t have the funds for Private.

The decent ones around here want tou to have access to at least £150k so she’s stuck and very vocal about just how miserable she is.

EmotionalBlackmail · 05/08/2025 22:06

PinkSparklyPussyCat · 04/08/2025 19:58

In my Mum's case she was able to stay in her own home until she died because we were able to make the house suitable with a stairlift and then downstairs bedroom. If she'd downsized she wouldn't have been able to do that.

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It sounds like it worked well for her, but what happens if the person becomes too frail to manage at home? Mine chose to go into residential care from a pleasant bungalow with wetroom and without any personal care needs because shopping was becoming a struggle, freezer meals weren’t great, home maintenance was getting beyond her ability to organise and she was terrified of security and being scammed as lived alone.

waxymoron · 05/08/2025 07:22

We have around 400k equity

Crikeyalmighty · 05/08/2025 00:06

Equity release can work really well but ideally into mid 70s and with ‘a lot’ of equity and drawing £75k or so and I’m talking 500k plus of equity

PinkSparklyPussyCat · 04/08/2025 19:58

EmotionalBlackmail · 04/08/2025 12:02

What happens if almost all the capital disappears into the equity release and the person needs to be in care home eventually? Surely they’ve then made themselves dependent on state care and removed choice (which home to go into, when they can go)?

In my Mum's case she was able to stay in her own home until she died because we were able to make the house suitable with a stairlift and then downstairs bedroom. If she'd downsized she wouldn't have been able to do that.

waxymoron · 04/08/2025 16:18

We've had 2 meetings with our advisor and are still thinking it through! It's a big decisionalthough seems logical in our particular circumstance.. Also yes I get the care home fees issue too.

dogcatkitten · 04/08/2025 15:18

https://www.moneysavingexpert.com/mortgages/equity-release/

This article may help to at least know what you might be looking for in the original contract, or what questions to ask if you contact the provider.

dogcatkitten · 04/08/2025 15:08

He must have got a lump sum from this, what did he do with it? I didn't think there were any payments to make, they will get their loan back when the house is sold and the remainder (if any) will go to his estate.

TorroFerney · 04/08/2025 15:05

EmotionalBlackmail · 04/08/2025 12:02

What happens if almost all the capital disappears into the equity release and the person needs to be in care home eventually? Surely they’ve then made themselves dependent on state care and removed choice (which home to go into, when they can go)?

Yes that’s right.

waxymoron · 04/08/2025 12:16

*sell, not see!

waxymoron · 04/08/2025 12:15

TallulahBetty · 04/08/2025 10:10

What was your plan for clearing the capital, out of interest?

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We had planed to see as can easily buy somewhere outright with the equity - just not in our home city though. We started looking earlier this year at villages nearby and it's still another option at the moment. The LM would let us stay here or we can port it if we do want to move in later years.
Yes, of course the thought of care is another thing to consider.
It's really not the easiest decision and f course I wish we'd had better paid careers, and had a repayment etc...just...life happens

EmotionalBlackmail · 04/08/2025 12:02

What happens if almost all the capital disappears into the equity release and the person needs to be in care home eventually? Surely they’ve then made themselves dependent on state care and removed choice (which home to go into, when they can go)?

PinkSparklyPussyCat · 04/08/2025 10:19

TakemedowntoPotatoCity · 02/08/2025 14:42

It's quite simple. If you want to leave an inheritance, don't do equity release. If you have no kids / family on the other hand, it's a great idea.

I was pleased when my Mum did it as it meant she could stay in her home. Downsizing wasn't an option and I'd rather she had the money when she needed it than leave it to me. As it turned out the type of equity release that she did meant I did get an inheritance but her security was more important

TallulahBetty · 04/08/2025 10:10

waxymoron · 02/08/2025 13:53

I know this is an old thread, I've just read it through. DH and I are in a position in our sixties where we have a house worth a lot of money and an IO mortgage (yes we were daft!), three adult kids and lots of things we want to do.

We've explained to the children we will most likely be taking a Lifetime mortgage rather than going through the stress of selling and moving somewhere we probably wouldn't really want to be - this is ours and their home, so we want to live in t and have them back (and the flipping gchildren - love them...!) whenever they want to, and downsizing just means a lot less space.

They were wholeheartedly 'go for it' when we explained there would be little or no inheritance, which was our main worry.

Of course we have spoken to our financial advisor and he has done us the quote. No negative equity, so if the amount owed is more, no worries for the kids apart from selling dh's vast record collection and clearing stuff out -but we all have to do that at some point!

I wont lie - it is slightly scary but the pros really do outweigh the cons, the sector is hugely regulated and whilst DH is now retired, I'm not due to for a few years. Doing this means I can, or at least massively reduce my hours and we can do a lot more of things we want to do together - we've had over 30 years of raising the children and loved it, but as the oldest dc said 'This is your time now'.

People see Equity Release and do remember the bad unregulated days I know, but really, at our ages, its a hugely popular and sensible move for some.

What was your plan for clearing the capital, out of interest?

waxymoron · 03/08/2025 08:15

We're also in a big city a mile from an excellent hospital!