Advice/views on Seniorsmoney.ie?

[Brik]

Hi there,

Not sure if this is the right place for the post, but hopefully someone can help.

Due to the collapse of shares etc, my parents are looking at this to release equity from their house and pay off loans rather than have to sell the house.

Does anyone know anything about Seniorsmoney.ie? It seems ok to me, but not sure if I have asked all the right questions.

Thanks

 

[twofor1]

My issue with this is it is a variable rate of interest which they may change at any time by simply writing to you or putting a notice in the paper so you have no way of knowing what this loan is going to cost.

Although you can repay the loan at any time, its unlikely anyone who takes one of these loans would ever be in a position to repay it until the house is sold, So Unlike a mortgage, you are stuck with this lender and whatever interest rate they choose to charge.

Their calculator on their home page states the current interest rate charged is 4.2% (4.5 APR), yet the example from their ’’all you need to know brochure’’ assumes a interest rate of 8%

4.2% probably isn’t bad, 8.00% is wild, maybe they are just exercising their right to charge what they like.
Loan Details
Age of Younger Applicant: 65 Maximum Loan Amount: €80,000
Estimated Property Value: €400,000 Requested Loan Amount: €80,000
Assumed House Growth Rate: 2.0% Setup Fee: €1,500
Assumed Interest Rate: 8.0% Net Loan Proceeds: €78,500

http://www.seniorsmoney.ie/

They also assume in their example that property prices are going to increase by 2% each year, a bit optimistic I would think.

Although they guarantee you will never have to repay more than the sale price of the house, it would be easy to see this lender getting most if not all the proceeds in many house sales, if the borrowers lived to a decent age.

I would not do it, but some would argue that you cannot take it with you so why not do it.

 

[geordief]

Has anyone got a view on this topic?