Very long or interest only mortgages

It is frightfully more expensive if you have trouble paying a normal mortgage by 65 I suspect it is not for you,
add suicide marriage or relationships break up into the mix along with life insurance not getting paid because money has run out after retirement,
 
I don't think any insurance company pays out in the unfortunate event of suicide leaving the people behind with a policy not paying out to cover the
Brendan Burgess said:
I don't think that is a fair description of all marriages.

Brendan
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mortgage in the unfortunate event of suicide,

Just badly stated by me, Brendan,

When I mentioned marriage it is again in the unfortunate event of marriage or relationship breakup again it gets messy making sure policy does not lapse and up to date at all times,
not to mention the possibility of being trapped in a mortgage until you are dead preventing you from ever owning a house again unless you are a cash buyer,
 
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kinnjohn said:
I don't think any insurance company pays out in the unfortunate event of suicide leaving the people behind with a policy not paying out ...
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There's no absolute line in this case; many (most?) life companies prefer to avoid the bad publicity & make an offer to settle claims. It depends on the circumstances.

The position in regards to divorce & the family home is different in almost every case; but in general paying the life assurance premium is no different from paying the home or car insurance.

I'm not sure I get the 'trapped in a mortgage till you are dead' comment.

Would it be better to be "trapped paying rent" till you were dead?

Or "trapped paying for residential care" till you were dead?

Everyone has to live somewhere until they die.
 
lff12 said:
Because OAP rate is only 225 or something like that, which for most mortgages would be insufficient. Pension coverage is poor, and so most people don't have what banks regard as an occupational pension, so for most they will only lend to 65.
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How is paying rent when living solely on the state pension any better?
 
If your sole income is the state pension, then you will probably qualify for Housing Assistance Payment
 
Thirsty said:
How is paying rent when living solely on the state pension any better?
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I think what Iff12 said is people with only the state pension to live on in retirement pay their mortgage during their working life, or depend on the state to make up the shortfall if paying the mortgage in retirement,
You need to have a good look at the average or mean income of people in paid employment in Ireland to understand,
 
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So my question is still the same - how is paying €150 per month in interest (per my example several pages ago) somehow worse than paying €1000 in rent?
 
you could be trapped in a mortgage on a house you are not living in until you are dead and at the same time
pay rent on the house you live in until you are dead,
if you drop dead and had not been paying your house or car insurance there would be no consequences
if you dropped dead and you had not paid life policy connected to a mortgage there are consequences,
 
Thirsty said:
How is that better than paying €150 per month in interest?
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we cannot go back to 1995 and a house costing 60k to build in 1995 could now cost well over 600k or more in 2021 ,
state pension in1995 was 58 punts, I suspect it would not cover a whole of life insurance policy don't mind interest if you had reached retirement age,

Askaboutmoney is full of people giving out about how high the state contributory pension is and want it to be lowered and suggesting it may not exist by the time they reach retirement,
If you were a bank and had the same view as posters on askaboutmoney I think you would want mortgage paid back before retirement,

How will this suggestion work with the Fair Deal Scheme does the state get shortchanged and pick up the tab,
 
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kinnjohn said:
How will this suggestion work with the Fair Deal Scheme does the state get shortchanged and pick up the tab,
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Fair Deal scheme doesn't change.

If someone aged 40 with a mortgage needs full time residential care the financial contribution is assessed; the necessary assessments are done in the same way for an 85 year old with a mortgage.
 
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you could be trapped in a mortgage on a house you are not living in until you are dead and at the same time [my emphasis] pay rent on the house you live in until you are dead,
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Is it just me or does this make sense to anyone else?
 
I was trying to flesh out the upsides and downsides of a lifelong Mortgage I was hoping the answer would show an example of any difference between having your mortgage paid by retirement time and still have a mortgage entering a nursing home,
I suspect you pay less if you still have a mortgage on entering a nursing home,

( we will assume the rules stay the same as of now)

I know when it comes to the estate of a deceased fair deal former resident any undeclared assets get picked up,

1 how is a life loan policy treated,

2 let's use a mortgage was taken out today as an example and let's keep it simple, nursing home fees 1000 per week

mortgage of 600K taken out to be paid on the death of the mortgage holder
home is valued at 600K on entering a nursing home,
How is it treated assuming they only have a state pension of 12K

3 let us use the same example this time the mortgage was 600K today is paid off on entering a nursing
home
A Nursing home fees of 1000 per week no other assets only the paid off mortgage-free home,
state pension of 12K no other assets
B Nursing home fees of 1000 per week no other assets a home valued at 600K a mortgage of 600K to be paid off
with a life loan on death, state pension of 12K no other assets but a liability to pay 6K per year until death,
Thirsty said:
Fair Deal scheme doesn't change.

If someone aged 40 with a mortgage needs full time residential care the financial contribution is assessed; the necessary assessments are done in the same way for an 85 year old with a mortgage.
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are you sure,
BUT a liability to pay a life loan of 6K per year until death,
My understanding of some life policies is once you reach a certain age of 60 or 65 it increases every few years getting a lot higher once you reach 60 or 65 years, A life policy at 40 to 60 years will be a lot lower than lets say 66,
The only advantage of some life policies is they have to renew it every few years without asking about your health,

I hope a poster with knowledge of lifelong insurance policies can help us out and provide the correct information on a life policy backing a mortgage I suspect they already exist or did exist in the past but increased every few years after reaching 60 or 65 years
 
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mortgage of 600K taken out to be paid on the death of the mortgage holder
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Interest only for the entire mortgage is not the proposal.

Now that I look at this again; I don't know many FTB who look for a 600k mortgage.

A search of myhome.ie this morning for 3 beds at 350k gives me 545 properties in the Dublin area alone; the cheapest of which is a tidy 3 bed in Balbriggan for €175k

How is it treated assuming they only have a state pension of 12K
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HSE Fair Deal Scheme is here: https://www2.hse.ie/services/fair-deal-scheme/about-the-fair-deal-scheme.html

Interest on home loans is deducted from your income as are a number of other outgoings.
 
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if on breakup and moving out of existing home a lifelong policy backing an asset gets tricky

some lifelong policies trigger a very high premium once you reach a certain age not disclosed until you reach that age and increased every few years, there is no way at the breakup of know what this premium will be,

1 if taken out at say 30 years and breaking up at say 56 and moving do you start a new policy an away higher rate or stay paying the existing policy some were set up to payout on the first partner's death,
2 if they stay paying it the insurance company will not tell you how much extra it will cost until reaching a certain age
reviewed and increased every few years from then on until death,
 
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In the event of Separation or Divorce, Family home and and other assets or liabilities are covered under existing legislation.

There's no additional provisions required so far as the proposal is concerned.

edit: updated to reference divorce / separation for clarity
 
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