The clue is in the name: A Lifetime Loan is designed to last for as long as you remain living in your home or as long as you live.
The loan does not become repayable until one of the following ‘repayment events’ arises:
Sell the home
The loan is made against your specific home. If you sell your home (for example to downsize) the Lifetime Loan would become repayable immediately. You are required to give reasonable written notice if you propose to sell the property.
Death of the last surviving Nominated Resident
To give your representatives time and space to settle the affairs of your estate, the Lifetime Loan does not become repayable until 12 months after your death (or the death of the last surviving Nominated Resident where there are two).
Ceasing to reside by the last surviving Nominated Resident
‘Ceasing to reside’ is defined as 12 consecutive months of not residing in the property.
This usually arises in the context of moving to long term care but other situations are possible too. If you intend to leave your home for a period of more than 12 months but also intend to return to it you must let Seniors Money know.
Where there are two nominated residents and one ceases to reside in the home. the loan is not due for repayment until 12 months after the other nominated resident ceases to reside in the home.
You or your estate may request an extension to the 12 month repayment timeframe but Seniors Money will not be obliged to agree to such request. However, they will consider all relevant circumstances and endeavour to agree to the request if there are valid reasons to grant an extension. As a last resort, the Lifetime Loan agreement and mortgage will enable Seniors Money to seek repossession of the house in the event that the Lifetime Loan is not repaid within this period.
Repaying the loan
If the loan becomes repayable due to your death, your executors will be responsible for repaying the loan. Seniors Money is very experienced in dealing with estate representatives at this very sensitive time, and has tried and trusted procedures for guiding them through what they need to do and when.
In all cases interest will continue to accrue and be added monthly to the loan until the loan is repaid and you or your estate may also be liable for the costs of repossession.
It is not obligatory to sell the property. You or your executors can repay the loan without selling the house if an alternative source of funds is available to make the repayment.
If the proceeds of the sale of your property net of legal and selling costs are not sufficient to repay the loan balance, the lender (Seniors Money) undertakes to make up the shortfall as long as you are not in default (see No Negative Equity Guarantee).
Any surplus between the net sale proceeds and the amount required to pay back the loan remains with you or your estate.