Most of us are use to the concept of a 10 year, 15 year, and 30 year mortgage. The number of years attached is the amount of time until our loan is supposed to be fully paid. The core demographic of these mortgage types are usually senior citizens, and people over the age of 55 in general. The loans are typically capped at 50% of the value of the home. The key difference from a conventional mortgage is that a lifetime mortgage isn’t required to be paid back within your lifetime. Rather it will be paid back after your death.
Monthly payments are not required on these loans, much like an interest free loan, you can allow the interest to continue to accrue. In a sense, it is nice that you will never have to foreclose on your home despite your financial position, but you can leave a mountain of debt behind after your gone if you aren’t careful. Often times family members are left holding the bag on these loans after their loved ones death. That’s exactly why you should always make routine payments on these loans, it is the financially responsible thing to do.
If you are considering a lifetime mortgage it is important that you do your research first. A lifetime mortgage calculator can aide you in making the right decision. They will allow you to view your accrued interest, payback amount, and your overall savings!