Cash for the trip of a lifetime

Mark Anthony continues our series on how to raise cash in an emergency. This week: the sick woman who longed for a holiday

Raising money when terminally ill can be an impossible task. Such a borrower is, by definition, a "bad risk", unless he or she can show that they have the means to repay the loan after their death. In this particular instance, however, a solution to an elderly lady's financial problems was found, and her dream was fulfilled.

Meg Campbell was initially shattered when her illness was diagnosed as critical. In her late sixties, she was advised that she had only a limited time to live. Instead of waiting for the inevitable to happen, she decided to fulfil one of her remaining ambitions: to visit Victoria Falls in Zimbabwe and Zambia.

Because of the spray thrown upwards - which from a distance looks like smoke - before it roars hundreds of feet to the Zambezi below, the locals call this natural wonder The Smoke that Thunders. When Dr Livingstone stumbled across the Falls in 1855, he was more poetic: "On sights as beautiful as this, angels in their flight must have gazed".

Meg had the determination to make the journey, and the blessing of her doctor. What she did not have was the means to pay for the trip. She telephoned a local independent financial adviser (IFA) and asked him to visit, so that she could discuss her problem.

During the conversation he learnt that Meg had no living relatives. She had made her will some time before. Apart from small bequests to friends, the main beneficiaries were a couple of charities Meg supported. Her house was valued at pounds 130,000. She wanted to borrow pounds 12,000.

The IFA's immediate solution was for Meg to borrow against her home. A building society was approached. It agreed to advance a minimum of pounds 15,000 on fixed interest only, over a 25-year term. However, Meg felt uncomfortable with this solution, as she would have been hard pressed to pay the monthly interest.

The IFA then suggested a Bank of Scotland loan. The way the bank's shared appreciation mortgage works is that in return for the borrower agreeing to share any future increase in the value of his or her home, the bank offers the mortgage free of interest. The shared appreciation percentage is three times the amount of the loan, divided by the value of the property, known as the "loan to value" (LTV) percentage. The valuation is made by an independent valuer and there is an appeal scheme in case of dispute about the property's value.

If a home is valued at pounds 100,000 and the loan is for pounds 20,000, the LTV is 20 per cent and the bank will share 60 per cent of any increase in value. When the borrower decides to leave, or leaves the scheme, the bank will instruct a valuer to determine an exit value. The borrower will then repay the amount borrowed, and any percentage increase in the value of the property. Should the property's value remain static, or fall, there will be no shared appreciation to pay.

The only costs in these circumstances are the valuation fees (pounds 150 for a pounds 100,000 property, up to pounds 500 for one valued at pounds 500,000), plus a pounds 500 arrangement fee; the legal costs of taking a first mortgage; a pounds 300 fee when exiting the scheme and an early repayment fee, equivalent to 1.5 per cent of the initial loan if the mortgage is repaid within three years.

Loans are not considered on leasehold property, or, currently, on homes in Northern Ireland. The maximum loan is 25 per cent of the valuation, subject to a minimum of pounds 15,000. Loans above pounds 125,000 are considered individually.

The scheme may not appeal to those who wish to retain the entire value of their property, but may be attractive to those who need more capital at their disposal. One would certainly be able to achieve one airline's old advertising slogan: "Travel first class, or your heirs will."

Meg borrowed pounds 22,000 and received pounds 21,000 after the bank's arrangement fee and legal costs. The IFA waived his fee. She flew business class to Victoria Falls to stay in a top-class hotel. Some of the remaining funds will be used to ensure that she is financially comfortable in her remaining months.

Details of shared appreciation mortgages from Teviot House, 41 South Gyle Crescent, Edinburgh EH12 9DR.

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

Arts and Entertainment
Lena Dunham
booksLena Dunham's memoirs - written at the age of 28 - are honest to the point of making you squirm
Jacqueline Bisset has claimed that young women today are obsessed with being 'hot', rather than 'charming', 'romantic' or 'beautiful'
Arts and Entertainment
A bit rich: Maggie Smith in Downton Abbey
tvDownton Abbey review: It's six months since we last caught up with the Crawley clan
Frank Lampard and his non-celebration
premier leagueManchester City vs Chelsea match report from the Etihad Stadium
Life and Style
A new app has been launched that enables people to have a cuddle from a stranger
techNew app offers 'PG alternative' to dating services like Tinder
Arts and Entertainment
Jake Quickenden sings his heart out in his second audition
tvX Factor: How did the Jakes - and Charlie Martinez - fare?
premier league
Arts and Entertainment
'New Tricks' star Dennis Waterman is departing from the show after he completes filming on two more episodes
tvOnly remaining original cast-member to leave crime series
Mario Balotelli celebrates his first Liverpool goal
premier leagueLiverpool striker expressed his opinion about the 5-3 thriller with Leicester - then this happened
Britain's shadow chancellor Ed Balls (L) challenges reporter Rob Merrick for the ball during the Labour Party versus the media soccer match,
peopleReporter left bleeding after tackle from shadow Chancellor in annual political football match
Arts and Entertainment
Female fans want more explicit male sex in Game of Thrones, George R R Martin says
tvSpoiler warning: Star of George RR Martin's hit series says viewers have 'not seen the last' of him/her
Plenty to ponder: Amir Khan has had repeated problems with US immigration because of his Muslim faith and now American television may shun him
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Senior BA - Motor and Home Insurance

    £400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

    Market Risk & Control Manager

    Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

    SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

    £320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

    Head of Audit

    To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

    Day In a Page

    A roller-coaster tale from the 'voice of a generation'

    Not That Kind of Girl:

    A roller-coaster tale from 'voice of a generation' Lena Dunham
    London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

    London is not bedlam or a cradle of vice

    In fact it, as much as anywhere, deserves independence
    Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

    Vivienne Westwood 'didn’t want' relationship with McLaren

    Designer 'felt pressured' into going out with Sex Pistols manager
    Jourdan Dunn: Model mother

    Model mother

    Jordan Dunn became one of the best-paid models in the world
    Apple still coolest brand – despite U2 PR disaster

    Apple still the coolest brand

    Despite PR disaster of free U2 album
    Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

    Despite the result, this is the end of the status quo

    Boyd Tonkin on the fall-out from the Scottish referendum
    Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

    Manolo Blahnik: Flats, Englishness, and Mary Beard

    The shoe designer who has been dubbed 'the patron saint of the stiletto'
    The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

    Scrambled eggs and LSD

    Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
    'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

    'Normcore': Blending in is the new standing out

    Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
    Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

    New leading ladies of dance fight back

    How female vocalists are now writing their own hits
    Mystery of the Ground Zero wedding photo

    A shot in the dark

    Mystery of the wedding photo from Ground Zero
    His life, the universe and everything

    His life, the universe and everything

    New biography sheds light on comic genius of Douglas Adams
    Save us from small screen superheroes

    Save us from small screen superheroes

    Shows like Agents of S.H.I.E.L.D are little more than marketing tools
    Reach for the skies

    Reach for the skies

    From pools to football pitches, rooftop living is looking up
    These are the 12 best hotel spas in the UK

    12 best hotel spas in the UK

    Some hotels go all out on facilities; others stand out for the sheer quality of treatments