Life Loans are back

Allpartied said:
Can you really see a BofI salesman, paid on commission, telling an elderly applicant that there is a very real risk that the entire house will become the property of the bank, within 10 or 15 years.
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I can, but people just don't want to hear it. Look at the number of threads on here over the years from people who make no attempt to read the most basic T&Cs before entering a contract.
 
RedOnion said:
In my opinion, someone in their late 80's shouldn't be worrying about not having anything left to pass on to their children. And their children should be making sure they're not worrying about it.
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"But it's my inheritance Joe! Sure, my parents scrimped, saved, and deprived themselves of simple pleasures for decades to pull it together, but now I demand they give me a lump sum to buy a house without affecting the big lump sum I'm entitled to when they kick it!"

/rant
 
But also, the first lady’s house is now worth €550k and she owes €204k.

She’s fine.

This has all the hallmarks of greedy children eyeing up their inheritance.

The beauty with the new Seniors money product is that you can repay 10% each year and/or clear it after 10 years.

So the children can make sacrifices if they so wish and clear it for their parents.
 
Gordon Gekko said:
The beauty with the new Seniors money product is that you can repay 10% each year and/or clear it after 10 years.
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Good point. Actually, there's nothing to stop the BOI being repaid either, my understanding is that it's allowed in the terms. However, there's a break fee calculation during the fixed rate period (15 years). But once that period is up, it's a variable rate.
 
Liveline called me back and said they would try to include me in the programme but can't guarantee it because they get so many calls.

Brendan
 
Attached are example BOI Life Loan brochures from 2004 & 2007.
 

Attachments

  • life_loan 2007.pdf
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  • life_loan 2004.pdf
    224.4 KB · Views: 388
It's pretty shocking really the level of financial illiteracy that exists. 'Compounding' is thrown around as an excuse for not understanding what would happen but in both of those brochures, the 'Working example of a Life Loan' very clearly shows in real monetary terms what would happen over 15 years. It's hard to argue that you didn't understand when it is clearly stated that if you borrow €62.5k today, you will owe €158k in 15 years.

I'm sure it made for great listenership figures for Liveline...
 
I love how they talk about “the Bank of Ireland” with the same reverence that people of a certain age have for the local priest.

Would the families have shared the upside if the properties had doubled in value as they hoped/expected?
 
The Brochures do seem to clearly and fairly explain the Product (at least as it was 14 years ago).

Is it still the case with the 2021 Product, that the loan is repayable if the borrower leaves the home for > 6 months?
If a person sells their house, it's their choice and they're likely to have factored in the repayment etc. and have an overall plan.
If a person dies, it's not great for them but it's as planned for this mortgage product.
But a borrower may have to leave their home (to live with Carers or in a Nursing home), which is a tough time for everyone. In most cases, the elderly person would rather stay at home, so having to repay the loan within 6 months seems like a lot of extra stress. 6 months is not a long time to arrange for payment.
 
With yesterday's callers anyway I don't think the overriding thing was 'greedy children' looking for an inheritance. The original caller was the elderly lady herself and I think it was clear she wanted to have something left to leave. In the other cases yes it was the adult children ringing but one parent was already dead and other was in 90s I think so clearly unlikely to ring in. I think it's kind of ingrained in older people to be leaving something after them and many do scrimp during their own lives to do so. I really don't think greedy children as such are the drivers behind this, I think the people themselves needed/wanted the money for whatever reason and went ahead with a bit of a 'la la la' attitude even when explained to them.

I processed mortgages for many years, I'm reluctant to say I sold them as I never went out looking for anyone to encourage to take out a mortgage, they came to me! No one wants a mortgage, no one gets up in the morning and thinks do you know what I'll got and get me a mortgage today, they want a house or the want the money for whatever reason, the mortgage is just a means to an end. For that reason most people really don't look at the details, in all my years processing mortgages one customer only ever actually read the back page of t&cs before signing on the dotted line despite everyone of them being invited to do so first.
 
Reboot said:
Is it still the case with the 2021 Product, that the loan is repayable if the borrower leaves the home for > 6 months?
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"A Lifetime Loan becomes repayable when you permanently cease to reside in your home or pass away. "

Lifetime Loans for over 60s - Spry Finance

A Lifetime Loan is a form of equity release mortgage which allows a homeowner aged over 60 to borrow against the value of their property
www.spryfinance.ie
 
Burgess in on right now. Pointed out to Joe the truth of David's story. Says why life loans are a good idea. (apparently listener David was on before).

That the Bof I brochure is very clear. Everything is listed. Life Loans could be repaid at any time. They did not have to pay the interest for 15 years. That people are desperate for loans, it's a good product for them. To go to an independent financial advisor.

Being given out to by one listener about Burgess's blood pressure.

Woman says there is no problem with the Fair Deal scheme. Because if you've a loan on the house you can't get the Fair Deal scheme

Siobhan - 6% compound interest, now 3%. BB tells her she can go in and pay off the loan. Fixed rate. So there is a penalty.

David Hall says: BB is coming on for the banks as the banks won't come on ! Agrees on independent financial advice. Advises on enduring power of attorney. Critical he says.

Hall says Life Loans are a Preditatory Product. That when you are vulnerable/old/ill it's a problem. Hall now attacking the banks of I, but Joe says it's not them anymore does the loans. Now on about the Minister, the Department. Most despicable product. Hall on with populist nonsense. How the banks were bailed out and the poor woman who borowed money for her daughters wedding.

Tom Murray - advisor - says they should be banned.
 
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From boards.ie
Joe: And there are udder experts who will disagree with you Brendan
Brendan: Not on this Joe
 
Can't believe the nonsense I was hearing. They took out the money, their parents did, gave the money to their adult children. Greedy adult children is what I'm hearing. Why didn't they borrow the money themselves.

- Listener whose parent borrowed, told them nothing about it until going out to the car to give them the borrowed money. Why didn't the child march the parent back in, repay the money immediately and cancel the product.
- Listener upset over fair deal because they can't get the Fair deal as there is a 'loan' on the house. Whose fault is that.
- David is in business, and was on the show in 2016.
 
It'd be nice if we could hear from someone responsible who took out the loan and could speak positively as to what they did with the loan.
 
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