Desperate times, life time mortgage??

[benm3evo]

Hi all,

I'm after a bit of advice for a friend please. I will try & keep as brief as possible.

He's 57 & lost his job a couple of years ago after working at the same place for over 30 years. He has next to zero chance of finding another job. He has a mortgage & owes around 40k. He has reduced the monthly payment to around £220. He is claiming his Pension (early) which is about £475. He also had lump sum which has now gone. He is now 1k over drawn & the balance is heading in the wrong direction.

He doesn't want to sell his house but things are getting desperate now. I have no knowledge/experience with this type of thing but I'm wondering if a life time mortgage (hopefully the correct term) might be an option? Where he can free up or release equity in the part of the house he already owns? We think the house is worth around 150k so estimating he owns 110k(ish) worth. I understand (possibly incorrectly) that he could free up 40kish then that gets paid back, plus interest, from his estate when he dies. This wouldn't be an issue for family etc as he has none.

I'm trying to persuade him to sort out the job seekers allowance but, extremely frustratingly, he can't be bothered. He did do it when he first lost his job but soon stopped going to the weekly appointment.

I've tried to keep this as brief as possible so may have left out important information but just wondering whether anyone can advise if the life time mortgage is even an option or whether there's anything else?

The most Key points are he doesn't want to move house & will run out of money completely, i.e. no money for even food, in the next 2 months I'd guess.

Thanks for any advice.
Ben

[sidicks]

benm3evo said:

Hi all,

I'm after a bit of advice for a friend please. I will try & keep as brief as possible.

He's 57 & lost his job a couple of years ago after working at the same place for over 30 years. He has next to zero chance of finding another job. He has a mortgage & owes around 40k. He has reduced the monthly payment to around £220. He is claiming his Pension (early) which is about £475. He also had lump sum which has now gone. He is now 1k over drawn & the balance is heading in the wrong direction.

He doesn't want to sell his house but things are getting desperate now. I have no knowledge/experience with this type of thing but I'm wondering if a life time mortgage (hopefully the correct term) might be an option? Where he can free up or release equity in the part of the house he already owns? We think the house is worth around 150k so estimating he owns 110k(ish) worth. I understand (possibly incorrectly) that he could free up 40kish then that gets paid back, plus interest, from his estate when he dies. This wouldn't be an issue for family etc as he has none.

I'm trying to persuade him to sort out the job seekers allowance but, extremely frustratingly, he can't be bothered. He did do it when he first lost his job but soon stopped going to the weekly appointment.

I've tried to keep this as brief as possible so may have left out important information but just wondering whether anyone can advise if the life time mortgage is even an option or whether there's anything else?

The most Key points are he doesn't want to move house & will run out of money completely, i.e. no money for even food, in the next 2 months I'd guess.

Thanks for any advice.
Ben

Even if he went down the lifetime mortgage / equity release route, this is a long process and I am unsure whether everything would be completed in 2 months.

This certainly would be an option for releasing cash, although interest rates are relatively high due to the uncertain nature of when the borrowing will be repaid.

I think the main issue is that he doesn't seem to recognise the seriousness of his situation - I can understand that he doesn't want to move house, but he may not have the choice. That said, a house sale is likely to take more than 2 months anyway.

[MentalSarcasm]

Separately from the "life time mortgage" thing, it sounds like your friend has depression. Can't be "bothered" to sign up for the JSA (this is necessary to keep his NI topped up, he might have problems with the state pension otherwise), feels that he can't get another job (not even in a supermarket?), doesn't want to move house (probably can't find the energy to even look for another property, let alone go through the buying and selling process).

Losing his job after 30 years must have been a huge shock and I can see why it would lead to depression. Have you encouraged him to go to his GP? A lot of men try to struggle through mental health issues as they feel like admitting to it makes them look "weak". Maybe you need to take the bull by the horns and convince him that a GP visit and probably some counselling or medication will help him get a change in outlook.

[benm3evo]

Thanks for the replies.

I figured the lifetime mortgage option would take a while. Although I'm not exactly flush myself I will obviously not leave a mate to starve so I can proabably keep him going for a short time if we know there's some money coming eventually.

It is also spot on he doesn't realise how serious it is, despite me trying everything to get some urgency about him.

As for the depression, that's an impressive diagnosis! He's suffered from it most of his life & is coping ok with medication (lithium plus something else I believe).

He got sacked from his last job which was Civil Service that then got out sourced. He said a few minor inappropriate things & they soon got shot of him. He is adament that the only job he can do is what he did before (messenger, post duties etc). He won't even consider a part time cleaning job, shelf stacking etc

I'm pretty sure we have exhausted all realistic avenues expect the equity release or selling the house. I am also pretty sure selling the house could be the end of him, he's 'joked' about this already so I'm trying everything I can to avoid this.

I also didn't realise JSA was necessary to keep NI topped up. I've got Tuesday off work so going to spend some time with him & try & get him signed up again. Head V brick wall again I'm sure!

Thanks,
Ben

[williaa68]

From the sound of it he's got ten years til his state pension kicks in, which, assuming he has a decent contribution record should help his financial situation materially. JSA is important as a passport benefit for things like council tax etc. You might want to take him to his local citizens advice bureau who can advise on benefits and, if he has debts, maybe help with those too before they spiral and he loses the house. Hanging onto it and the equity in it should be his priority as once he gets to 67 he should be ok....

[benm3evo]

Yes, that's the issue, these 10 years to get through as then I'm sure he'll be able to manage on the state pension.

We're going to try & sort out the JSA tomorrow & also go to the Citizens advice & see what they say.

One small example of what I'm dealing with.....saw him on Saturday, he told me how he'd seen 'the brightest torch ever' from a company in America & he had to have it. £45. Just before my jaw hit the floor in disbelief he then went on to say he'd ordered more than one by accident, 20 actually!!!! Luckily he's been able to cancel the order & double-checked at his Bank. I had to laugh in the end.

He has had one bit of good news, the Charity for Civil Servants have given him £500 so that helps with the over draft at least!

Cheers,
Ben

[Integroo]

benm3evo said:

Yes, that's the issue, these 10 years to get through as then I'm sure he'll be able to manage on the state pension.

We're going to try & sort out the JSA tomorrow & also go to the Citizens advice & see what they say.

One small example of what I'm dealing with.....saw him on Saturday, he told me how he'd seen 'the brightest torch ever' from a company in America & he had to have it. £45. Just before my jaw hit the floor in disbelief he then went on to say he'd ordered more than one by accident, 20 actually!!!! Luckily he's been able to cancel the order & double-checked at his Bank. I had to laugh in the end.

He has had one bit of good news, the Charity for Civil Servants have given him £500 so that helps with the over draft at least!

Cheers,
Ben

He may be your mate, but I would be very cautious about putting your hand in your pocket to help him out, if he can't be bothered to sort out his jobseekers allowance, is too proud to work in a supermarket, and is buying forty five quid torches as he approaches poverty ...

[TooMany2cvs]

benm3evo said:

He has next to zero chance of finding another job.

Another similar-level, similar-income job, perhaps. But there's always Tesco/B&Q...

benm3evo said:

He doesn't want to sell his house

A lot of people have to do things they don't want to do. Isn't it better to sell it before he gets into deep debt than wait until it's repossessed?

benm3evo said:

I have no knowledge/experience with this type of thing but I'm wondering if a life time mortgage (hopefully the correct term) might be an option? Where he can free up or release equity in the part of the house he already owns? We think the house is worth around 150k so estimating he owns 110k(ish) worth. I understand (possibly incorrectly) that he could free up 40kish then that gets paid back, plus interest, from his estate when he dies. This wouldn't be an issue for family etc as he has none.

Seems young for it - he could easily live for another 30+ years. Interest on that debt is going to roll up massively, and the house probably can't be guaranteed to cover the debt when he dies.

benm3evo said:

I'm trying to persuade him to sort out the job seekers allowance but, extremely frustratingly, he can't be bothered. He did do it when he first lost his job but soon stopped going to the weekly appointment.

He probably doesn't see it as worthwhile, because he doesn't WANT to get a job. He's mentally retired already, and quite possibly heading for depression if he isn't already there.

[Sheepshanks]

TooMany2cvs said:

Seems young for it - he could easily live for another 30+ years. Interest on that debt is going to roll up massively, and the house probably can't be guaranteed to cover the debt when he dies.

I think rules now are they can't take more than the property is worth so that might prevent him from being able to use equity release.

[mackay45]

Integroo said:

He may be your mate, but I would be very cautious about putting your hand in your pocket to help him out, if he can't be bothered to sort out his jobseekers allowance, is too proud to work in a supermarket, and is buying forty five quid torches as he approaches poverty ...

He didn't say anything about putting his hand in his pocket? He's just trying to help his mate out but more organisationally than financially by the looks of things.

Also he didn't buy the torch, didn't you read the full message?

OP, you're doing the right thing. Try and keep his motivation up, if he gets the JSA sorted as a stopgap and can then get some sort of work lined up he'll be able to keep himself afloat.

Looking at things the other way, he owns circa 75% of his house. If he sorts himself out with a job clearing the mortgage and owning the place outright himself within the next 5-10 years is easily do-able.

Can he take in a lodger or anything like that or is it a 1 bed place?

Edited by mackay45 on Monday 16th October 14:47

[Integroo]

mackay45 said:

Integroo said:

He may be your mate, but I would be very cautious about putting your hand in your pocket to help him out, if he can't be bothered to sort out his jobseekers allowance, is too proud to work in a supermarket, and is buying forty five quid torches as he approaches poverty ...

He didn't say anything about putting his hand in his pocket? He's just trying to help his mate out but more organisationally than financially by the looks of things.

Also he didn't buy the torch, didn't you read the full message?

OP, you're doing the right thing. Try and keep his motivation up, if he gets the JSA sorted as a stopgap and can then get some sort of work lined up he'll be able to keep himself afloat.

Looking at things the other way, he owns circa 75% of his house. If he sorts himself out with a job clearing the mortgage and owning the place outright himself within the next 5-10 years is easily do-able.

Can he take in a lodger or anything like that or is it a 1 bed place?

Edited by mackay45 on Monday 16th October 14:47

benm3evo said:

I figured the lifetime mortgage option would take a while. Although I'm not exactly flush myself I will obviously not leave a mate to starve so I can proabably keep him going for a short time if we know there's some money coming eventually.

Hmm. Also, two things: the story re. the torch doesn't make it clear that all twenty went back, rather than just nineteen; and he shouldn't be contemplating buying a forty five quid torch in the first place.

The sentiment to help out is admirable, I just said he should be cautious given the chaps approach to his own situation.

[benm3evo]

mackay45 said:

Looking at things the other way, he owns circa 75% of his house. If he sorts himself out with a job clearing the mortgage and owning the place outright himself within the next 5-10 years is easily do-able.

Can he take in a lodger or anything like that or is it a 1 bed place?

It is a 2 bedroom house but I don't think the lodger would be realistic. Not sure how to explain but he has next to no social skills, even after being able to hold down the job for 30 years. He's well known for making inappropriate comments, especially to women. He's totally harmless but doesn't seem to get that strangers don't want to know that he hasn't had sex for over 20 years!


Re. a couple of the other quotes (sorry, I couldn't work out the multiple quoting!) I am 99% convinced he doesn't want to get another job, even though he says he is so bored stuck in the house all day. Having said that, he will happily help my mate move house & things like that so it's not as though he's lazy, he just can't think for himself & has no motivation or recognition of the situation he's in.

Re. the lifetime mortgage, I'm going to call a couple of companies tomorrow just to try & get an idea if it's even possible.

Re. selling the house, I can see that it would be better, in theory, to sell now before the worst comes to the worst but I honestly don't think he'd cope. He lives near to me & my mates now so he comes down the Pub with us for a pint every now & again. If he ended up having to move away so this couldn't happen as much I think it would end badly as he says how it's all he has to look forward to. Plus he just doesn't deal with change very well at all.

Cheers, Ben

[mackay45]

Integroo said:

Hmm. Also, two things: the story re. the torch doesn't make it clear that all twenty went back, rather than just nineteen; and he shouldn't be contemplating buying a forty five quid torch in the first place.

The sentiment to help out is admirable, I just said he should be cautious given the chaps approach to his own situation.

Sorry, it's me that's not reading properly then!

Agreed re a cautious approach to any lending (don't lend anything you can't afford to not see again).

[benm3evo]

Re. the torches, sorry I didn't make it clear. He did indeed cancel the whole order &, as far as I know, has not re-ordered another one. It does absolutely beggar belief why he thinks this is a priority or a good idea, this is what I'm up against! He has a house full of gadgety type things, torches, models etc that he blew his Pension lump sum on. I could write a book on the things he's done.

If I had the money to lend (give) him then I would but I certainly don't. If push comes to shove I will take him to Sainsbury's & buy him some essentials so he doesn't starve but I'm certainly not giving him money that he'll end up spending on a bloody torch!

Thanks again for the advice etc.
Cheers, Ben

[TooMany2cvs]

Everything you've said about him sounds as if he's somewhere in the foothills of the autism spectrum - lack of social skills, inappropriate remarks, not quite getting boundaries of acceptable conversation, resistance to change, lack of recognition of his situation, fixation on gadgets.

[mikeiow]

TooMany2cvs said:

Everything you've said about him sounds as if he's somewhere in the foothills of the autism spectrum - lack of social skills, inappropriate remarks, not quite getting boundaries of acceptable conversation, resistance to change, lack of recognition of his situation, fixation on gadgets.

Challenge then is "how to help". Short of being prepared to have him move in with you, I think you need to examine who else can help.
I doubt a mortgage company would want to deal with you.
I think dragging him to a citizens advice place would be a starting point. If he is unable to see the seriousness of his situation, it needs external help, and it sounds like you have tried pretty well all you can.
Good luck!!

[red_slr]

I am confused, he has claimed £500 from Civil Service charity (never knew there was such a thing) so I assume he is ex civil service but has 30 years service and 400 pension? Does not add up to me?

What did he actually do?

[eldar]

red_slr said:

I am confused, he has claimed £500 from Civil Service charity (never knew there was such a thing) so I assume he is ex civil service but has 30 years service and 400 pension? Does not add up to me?

What did he actually do?

Could be a low paid but basic job, 30 years years contribution on an 85ths pension less 8 or 9 years draw early penalty and possible lumps sum maximised. Leaves £6k/pa?

[benm3evo]

red_slr said:

I am confused, he has claimed £500 from Civil Service charity (never knew there was such a thing) so I assume he is ex civil service but has 30 years service and 400 pension? Does not add up to me?

What did he actually do?

He worked for MAFF/DEFRA as a Messenger (postman basically) I did the IT there which is how I know him. He was tolerated at DEFRA as everyone knew him but when they were outsourced to another private company they were soon onto him.

I wasn't aware of the Charity for Civil Servants either. Someone at work (DEFRA, I still work there sometimes) mentioned it might be worth a phonecall so I did, next thing they've sent him £500, lucky!

When he lost his job he had no savings & it was obvious he was going to struggle to find work so had to take his Pension early (at 55). He had a lump sum & then the 400 odd a month.

Update from today; I've signed him up for JSA again. Waiting for a phonecall to arrange the interview so I've drilled it into him how he's got to go along with it & be open to the fact he could actually find work as that's the whole point of it....obviously the money should keep him afloat & buy him some time too.

He's also got someone coming to see him tomorrow to discuss the lifetime Mortgage possibilities. They didn't give much of a clue on the phone whether it's an option or not so will have to see what happens tomorrow,

Cheers,
Ben

Edited by benm3evo on Tuesday 17th October 20:26

[markbigears]

Ben, just been reading your posts. If everyone had a mate like you the world would be a far better place. Have no advice, but good luck and hope your mates problems get resolved.