In our last blog, we focused on ‘Mortgage Prisoners’, those that are trapped in a Mortgage with no way of re-mortgaging or otherwise clearing their mortgage and who may be at risk of losing their homes. Learn more about Mortgage Prisoners and how we can help in our previous blog post.
As described, Mortgage Prisoners are often found in closed books lenders (Not taking on new clients or providing further lending to existing clients). However, those books can be bought out by new Mortgage Lenders to maintain and collect the debt. It has recently been found that a large number of clients of the now shut-down Northern Rock have been transferred to new Lenders. This leaves the clients in a difficult situation in that they are unable to change their product or provider and are saddled with high interest rates and in many cases a change in the terms and conditions that they signed up for in the original loan.
A large number of complaints have been made to these companies, most notably NRAM Limited, Landmark Mortgages Limited, Heliodor Mortgages (Topaz Finance Limited) and Whistletree (TSB Bank PLC). This has gained momentum, and a class action lawsuit is now being made. The intention of which is to force these lenders to review their terms and provide compensation for those trapped with these potentially onerous terms and situation.
Equity Release – How a Lifetime Mortgage can assist.
As we discussed in our last blog (here), an Equity Release lifetime mortgage could be a valid solution to the plight of the Mortgage Prisoner. Provided you have enough Equity in the property, you can potentially raise the funds to clear the existing interest only mortgage by way of acquiring a Lifetime Mortgage. This has many potential benefits such as:
Potentially lower rates.
The option, but not the obligation to make payments for those that have insufficient income, or more flexible payments options for those who do.
Tenure for life ensures that you can remain in the property for the rest of your years, even if you make no payments and the interest rolls up to eclipse the value of the property.
The ability to retain your home in the event their current mortgage term has come to an end or payments are unfeasible.
If you are a mortgage prisoner and looking for a solution to your Mortgage needs. Equity Release may be worth investigating. You can use our calculator to see how much you can raise, and we’re happy to consider any inquiries made. We offer a free, no obligation call for those that are interested, and if we are unable to help, we can point you in the direction of non-profit bodies who will offer support.
Class Action Details
Harcus Parker Solicitors have agreed to work with clients by way of a class action lawsuit on behalf of former Northern Rock Mortgage customers whose mortgages were transferred to the above lenders, with an aim to get those affected compensation where possible. You can find more information at: https://mortgageprisonersclaims.com/
Summary: How we can help you.
The plight of the Mortgage Prisoner is a pressing issue that demands attention and action. Despite being locked into mortgages with unfavourable terms there could be other options and support available. If you are interested in investigating Equity Release as a potential solution, please do not hesitate to contact us for a free, no obligation call to see if we can help.
We’re here to support you every step of the way.