# Seniors Money



## peter.x.slade (6 May 2016)

My wife and I took out a Seniors Money loan of €150,000 eight years ago. The compound interest has added €60,000 to that since then. We would like to get rid of it, but our only source of funds is our shares portfolio, which has a current market value of €90,000. In your opinion, would Seniors settle for a lesser sum than €210,000, payable immediately, or would they just sit it out until our house is sold? Or should we pay off €90,000, and hope for the Lottery to come up? We’re still good for a few more years on the clock, and one of our children, aged 27, will have to continue living in the house, for medical reasons.


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## moneybox (6 May 2016)

Never heard of them, however, from looking at their website, they look like an equity release company.  I tried out their calculator and put 300,000 as value of my house the most they will lent to me is 50,000. I persume your house is valued alot more as they lent you 150,000. Would downsizing be an option for you so as to enable  you to pay this company off?


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## elcato (6 May 2016)

moneybox said:


> I persume your house is valued alot more as they lent you 150,000.


It was eight years ago so property is valued a lot less now. But your advice is a good one about downsizing. I doubt very much they will do any deals. Why would they unless the real value of the house is diminishing which is unlikely.


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## Brendan Burgess (6 May 2016)

peter.x.slade said:


> My wife and I took out a Seniors Money loan of €150,000 eight years ago. The compound interest has added €60,000 to that since then.



That sounds like extraordinary value. Are you sure you have the figures correct? That is an annual rate of around 4.2% which is unlikely for such a loan. 

No, they won't do a deal.  They might accept the €90,000 as part payment so that you would be running up less interest. 

What did you do with the €150k? 

Brendan


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## 44brendan (6 May 2016)

peter.x.slade said:


> My wife and I took out a Seniors Money loan of €150,000 eight years ago.


You obviously needed significant funds at a time in your life when this was your only option of obtaining large funding. There is a cost to this and as explained by B Burgess you are being charged a reasonable annual rate of 4.2% compounded. This is the deal that you entered into and you must have realized that by doing so you were effectively relinquishing a considerable portion of the equity in your home in the process. That standard process of borrowings of this type is that you pay nothing for the duration of your lives and upon death the home is sold with the initial proceeds being used to clear the facility inclusive of compounded interest. Given that you borrowed in 2008 it is quite likely that the value of your home has dropped considerably in the interim. You would be hoping for a future annual property appreciation of at least 4.2% in order to avoid losing more equity in your PDH.

As per BB's response above there could be no deal as proposed by you and it would be a high risk strategy to invest all of your savings in reducing the loan balance. On the positive side you can enjoy the comfort of living in your property until such time as both parties pass away.


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