Retirement

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Mortgage Questionnaire – Term Past Retirement
Client(s) Name Date MORTGAGE SUMMARY
At what age do you expect to retire? What is the selected term of the mortgage? Total loan £

POTENTIAL INCOME IN RETIREMENT
Income that would continue in retirement (e.g. income from investment, rental properties, etc). Basic State Pension and Additional State Pension Occupational salary-related schemes (defined benefit / final salary schemes) Any other pension arrangements (personal pensions, occupational defined contribution) Total potential income Will the mortgaged property be used as your main residence? If not the main residence, please describe below how you intend to use the property: £ £ £ £ £ Yes / No

Please explain below, in as much detail as you can, the reason(s) why you wish to have the mortgage running past your anticipated retirement date:

© 2007-2008 Sesame Group Ltd ALL RIGHTS RESERVED

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DR PostR Q v2 April 2008

TICK ONE OR MORE OF THE OPTIONS, THEN GIVE MORE DETAIL IN BOX: PLAN FOR REPAYING MORTGAGE ON OR PAST RETIREMENT Mortgaged property is not main residence, so it can always be sold in absence of any other plan to repay I / We am / are already retired and can afford the capital and interest repayments. I / We am / are already retired and can afford the interest only repayments. The mortgage debt will be repaid from estate after death I / We am / are not concerned about the mortgage running past retirement as I / we believe we expect to have a lump sum at retirement sufficient to clear the mortgage I / We am / are not concerned about the mortgage running past retirement as I / we believe we can afford the repayments in retirement Save up regularly, and use money to pay occasional lump sums to the mortgage account over the next few years to ensure clearance by retirement Use bonuses to pay lump sums to reduce the loan amount to ensure clearance by retirement Sell property and release funds to repay debt by moving to a smaller/cheaper home at retirement or earlier Set monthly payment into mortgage account above required payment level, to gradually reduce debt I / We own one or more additional properties, which will be sold to release money to repay debt on main residence Sell assets (other than property) to release funds to repay any outstanding debt at retirement or earlier Sell property and move overseas within the next 5 years Remortgage to a shorter term in the next 5 years, once affordability becomes more practical. Renovate the mortgaged property and sell it on at a profit within the next 3 years I / We expect to inherit enough money to repay the mortgage before retirement Changing to equity release at retirement for low LTV mortgages 19 1 191 2 / 31 4 / 52 1, 7, 8, 9 1, 7, 8, 16 6, 14 7, 9 10, 11 11 11, 12 13 15 17 18
RISKS

TICK

Use this box to add further detail about the option you’ve ticked, or to explain any other debt repayment plan not included in the table.

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Only applies to couples.

Adviser to delete the factor that does not apply due to his authorisations.
Page 2 of 4 DR PostR Q v2 April 2008

© 2007-2008 Sesame Group Ltd ALL RIGHTS RESERVED

RISK FACTORS MOST RELEVANT TO EACH PLAN LISTED ON THE PREVIOUS PAGE: SPECIFIC RISK FACTOR(S)
1. You have indicated you intend to pay off lump sums between now and your retirement so you can clear your mortgage by the time you retire. You need to ensure you do this. After all, when you retire, your monthly income will fall. Could you afford to continue paying your mortgage at this time? You have indicated you expect to have a lump sum at retirement that will be sufficient to clear your mortgage. I have not been able to verify this. However, it is your responsibility to ensure you can clear your mortgage. After all, when you retire, your monthly income will fall. Could you afford to continue paying your mortgage at this time? You have indicated you expect to have a lump sum at retirement that will be sufficient to clear your mortgage. Based on the figures you have shown me, I believe this is possible. However, it is your responsibility to ensure you can clear your mortgage. You have indicated that you have sufficient income after retirement to continue meeting the monthly repayments. I have not been able to verify this. However, it is your responsibility to ensure you can continue to pay your mortgage. Don’t forget that when you retire, your monthly income will fall. Could you afford to continue paying your mortgage at this time? You have indicated that you have sufficient income after retirement to continue meeting the monthly repayments. Based on the figures you have shown me, I believe this is possible. However, it is your responsibility to ensure you can continue to pay your mortgage. Don’t forget that when you retire, your monthly income will fall. Could you afford to continue paying your mortgage at this time? You have indicated you intend to sell the property and downsize before you retire. In this way you expect to be able to clear the remainder of your mortgage. It is your responsibility to ensure you act upon your intentions. However, you may find that downsizing does not necessarily mean you can clear your mortgage, depending upon property prices at that time. Many lenders impose early repayment charges on their products – including on regular and lump sum overpayments. If you are counting on putting money into a savings account to use for lump sum repayments, are you sure you’ll be able to afford it and that you’ll have the necessary self-discipline? You should also consider a flexible mortgage, arranged on a repayment basis, that allows you to vary your monthly payments, or even take payment holidays. It may not be prudent to rely on house price inflation to let you clear any charges on the separate property, PLUS the new mortgage. The asset might not be readily sellable, or may fall in value. If it is a property, you need to be confident that there will be sufficient equity available to cover the costs of selling (including clearing any mortgage on it), as well as the sum needed to repay the uncovered debt on your main home. If you don’t get round to doing anything to ensure repayment of the debt at the end of the term, you may find that the lender will force the sale of your property to get its money back. If that happened, you would lose your home and may be forced to rent, or buy somewhere much smaller/cheaper. The longer you wait to switch to a shorter mortgage term, the larger the jump in your monthly repayment is likely to be. If the reason you want a long term for your mortgage to start with is so you can afford it, affordability may well continue to be a problem. Your salary, and general financial position, might not improve as quickly as you are hoping it will. It may not be safe to assume that downsizing (after moving costs) will repay the whole loan. When it comes to the crunch, you may not want to downsize to clear the debt. Downsizing to release funds to boost your income/lifestyle in retirement is one thing, but being forced to do so just to clear your debts is quite another. This is not considered sensible financial planning. If you end up downsizing to help repay your mortgage, it is questionable whether you have gained anything by this course of action. Property renovation might not achieve the profits you are hoping for, especially if the work turns out to be more difficult and expensive than expected and/or the property market goes against you. Have you got enough money to cover the renovation costs? Could you afford to switch to repayment later on if your plans go awry? Unless you have a written guarantee you are going to receive a bonus and / or salary increase sufficient to make a difference, reliance on this may not be in your interests. How can you be sure the money will become available? Unless you are the beneficiary of an estate already going through probate, you cannot guarantee how much you will end up inheriting (if anything), or how long it will be before the money becomes available. There is the possibility that house prices may have dropped at the time you want to move to an equity release arrangement. Similarly, it is possible that no equity release provider will offer a large enough loan to clear the existing debt. If meeting the payments depends on having both incomes or a large proportion of the main income, have you considered the potential risks if one of you dies?

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© 2007-2008 Sesame Group Ltd ALL RIGHTS RESERVED

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DR PostR Q v2 April 2008

BASIS OF RECOMMENDATION Adviser recommends that I take out a mortgage which will run past my anticipated retirement age. Adviser recommends a shorter term, (to be described in suitability letter) but I wanted to arrange the loan to run past my anticipated retirement age

TICK ONE OF THE
OPTIONS BELOW

APPLICANT DECLARATIONS (must tick or initial boxes 1-4) 1 2 3 4 5 I understand that my home is at risk if I fail to either keep up repayments during the term of the mortgage or repay the capital amount of the loan at the end. I confirm that my plan to repay the mortgage is accurately described in this questionnaire I understand it is my responsibility to put that plan into effect. The adviser has explained the risk factors that are most relevant in my case (i.e. the risks numbered against my selected “Plan for Repaying Mortgage on or past Retirement”). I understand that my adviser recommends my mortgage term should not run beyond my anticipated retirement date. However, I wanted the arrangement to run into retirement and understand that this term may be less suitable.

Applicant 1

Applicant 2

Name (1st Applicant)

Date Name (2nd Applicant)

Signature

Date Additional notes box (e.g, to explain adviser’s recommendation to run past retirement)

Signature

© 2007-2008 Sesame Group Ltd ALL RIGHTS RESERVED

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DR PostR Q v2 April 2008

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