I hope my column finds you all well and things are slowly returning to some sort of normality after the Covid 19 outbreak.
I thought it may be a useful reminder to point out some of the pros and cons with a lifetime mortgage (equity release) and look at any recent changes with them.
Firstly the pros. If you do not need to raise money because you have enough cash in the bank to support your retirement and maintain your standard of living, then you probably do not need to do this. If you are on any means tested benefits, then you need to look at if you did a lifetime mortgage then how would this affect your benefits. If you have enough by way of pension income to afford the holidays, maintain your home and garden then you may not need to do equity release. In short if you have savings and good incomes in retirement, I think that you can relax and enjoy your retirement.
There are clients unfortunately are the opposite of the above for what ever reason and circumstances. If you do not have a good pension or savings in the bank to enable you to enjoy your retirement to the full then carry on reading.
Also, if you do have the savings and income but you need or want to help your children out this may be for you. If you want to help your children on to the property ladder, university support or just buy then their first car then this could help. If you want that motorhome you have always dreamed of then you may be surprised how much you could save if you financed it by way of a lifetime mortgage.
So back to the basics. You can borrow a lump sum on your home which is only dependant on two criteria. The value of your home and the youngest clients age (min 55). The company will then lend you a percentage based on this factor. If you want to call me on 01271 379444 or just drop me an email to firstname.lastname@example.org to find out how much you could borrow and I will advise you of your options.
When ever you are offered any money then the interest rate you are offered is fixed for the life of the mortgage. It will not go up or down. At this point I should mention we are independent, so we deal with over 12 companies to find you the best deal. Hence all this information is generic. You can let the interest roll up on the mortgage and therefore you never have to make any payments back to the company. Instead on the last client to go into long term care or passing on the loan plus interest will be paid off then. Or you can pay the interest and keep the loan at the amount you borrowed. You can pay some, none or all the interest. In fact you can make over payments as well by up to 10% in most cases. (some are more).
Once you have your lifetime mortgage you do not need to stay in the same home. Should you wish to move you can do so. If you wish to downsize that’s fine. If you wish to by a larger property then this is also ok.
Lastly should you wish to do this lifetime mortgage but you are adamant that you want to leave some to your children or estate then we can even build in inheritance protection. This means if you want to say protect 30% of your homes value to go to wherever upon your demise then this can be written into the mortgage. Simply put when the property is sold 30% (or whatever amount you choose) goes to your chosen beneficiaries’.
I hope this has been useful. Should you require any more information on lifetime mortgages please drop me an email email@example.com or give me a call on 01271 379444.
Please continue to stay safe
Lee Martin CeMap CeRER DipFA