Customer Scenario

John Green


John has been retired for 4 years, he met his wife and they married  when he was 40 and he and his wife purchased their 1st home together. At the time Mr & Mrs Green opted for an interest only  mortgage as this allowed them to buy a larger property in a more  sought-after location. Their plan was to downsize when the mortgage term came to an end. 

The couple took a 30-year term. Sadly, Mrs Green passed away last year and John has been struggling to pay the mortgage, he is not ready to leave his home he shared with his wife and would like to remain in the house where he has a support network of local friends and neighbours. 

John is worried that the mortgage will need to be repaid within the next 6 months and he does not have the funds to pay the mortgage off fully. 

The property is a lovely detached bungalow with a current estimated value of £300,000 the outstanding mortgage is £120,000. John is now on a variable rate interest of 4.2% and is paying a monthly amount of £420. His current mortgage provider has suggested John seeks independent financial advice to review how he can resolve his problem. 
John contacts a financial adviser and after a thorough discussion with the advisor, they conclude that a Lifetime mortgage will not release enough capital to repay the debt due to his age and affordability. 

The Bridgewater Home Reversion plan may be able to offer John an alternative, the advisor ascertains what the key priorities are for John. 

Does he want to stay in his home or would he now choose to downsize? After further discussion John's priority is to remain in his home. 

The Bridgewater Home Reversion plan allows John to release £132,000 if he can pay a small monthly rent of £200. The home reversion plan would release enough money to pay John's mortgage and give him a little extra if he needed. His monthly payments would reduce from £420 to £200 giving him that little bit extra monthly income. Providing John pays the monthly rent, he can continue to live in his home for the rest of his life. If at a later stage he decides the property does become too large he will have the option to move home under the plan terms & conditions. There is an added benefit that if he decides to vacate the property within the first 5 years of taking out the plan he will be entitled to an early vacancy payment. 

Having decided that he really does not want to leave his home he proceeded with the plan. 
Benefits to the client: 
  • Ability to repay his mortgage.
  • Reduction in mortgage payments by £220 per month.
  • Ability to stay in his home.
  • If he leaves within the first 5 years, he will be entitled to an Early Vacancy Payment.
N.B - A home reversion plan involves selling part or all of your property.

The above customer scenario is for illustration purposes only.  Important - this is a Home Reversion plan.  To understand the features and risks please ask for a personalised illustration from your Financial Adviser. Your home is at risk if you do not keep up repayments of rent. 
John Green