You may have heard of Lifetime Mortgages often referred to as 'Equity Release' and wondered if it would be right for you.
There are essentially three reasons to consider a Lifetime Mortgage;
- You need or want access to a lump sum and have no other assets
- You would like a boost in income to either meet essential costs or increase your standard of living
- You want to buy a new home that is more expensive than your current one and find you are 'too old' for a traditional mortgage.
How Equity Release Works.
Regardless of your reason for considering equity release you are probably wondering how it works.
We generally refer to 'equity release' as a Lifetime Mortgage as it is a good description of exactly what the product is. A lender simply grants you a mortgage against your property and does not expect you to make any repayments (though some products allow you to). Instead of you making repayments the mortgage interest is added to the loan.
The loan plus interested is then paid at a point in the future when your home is sold either because you have passed on or no longer need it.
We ensure that all of the Lifetime Mortgages we recommend comply with the SHIP (Safe Home Income Plan) standards meaning;
- The interest rate must be fixed or have an upper cap - this way you can predict exactly how the debt will build-up
- You must have the right to remain in your property for life or until you need to move into long-term care, provided the property remains your main residence and you abide by the terms and conditions of your contract.
- You have the right to move to another property subject to the new property being acceptable to your product provider as continuing security for your equity release loan.
- The product must have a “no negative equity guarantee”. This means that when your property is sold, and agents’ and solicitors’ fees have been paid, even if the amount left is not enough to repay the outstanding loan to your provider, neither you nor your estate will be liable to pay any more.
If you would like to discuss if equity release could be the solution you're looking for then please give us a call on 0191 4066453 or use the form on this page to contact us.
We believe in total transparency in all we do so you will find our charges are published on the pricing page of this website for all to see.
It is important to understand the risks and cost associated with a lifetime mortgage. It will reduce the equity in the property as well as the amount of inheritance you can leave your beneficiaries, It is also important to understand that access to benefits may be limited or unavailable.