Later Life Lending & Equity Release Warrington
Lifetime mortgages are a way of releasing capital from your home to obtain a lump sum or a steady stream of income using the value of your house. Some clients find themselves asset rich but cash poor in later life, with their biggest asset being the one they live in.
Releasing equity from your house can help pay for home improvements or provide you with a regular income so you don’t have to downsize.
The “catch” is that the income-provider must be repaid at a later stage, usually when the homeowner dies. Please call the office to discuss Lifetime mortgages in more detail.
What Is A Lifetime Mortgage?
- Equity is the value of your home, minus any mortgage or loan secured against it.
- A lifetime mortgage allows you to access equity and turn it into funds for your retirement.
- You must be aged 55+
- The property must be your main residence.
- You keep ownership of your home.
- Interest is charged on the amount you borrow – you can either add this to the total loan amount or you can make repayments.
- The loan is repaid when your home is sold, usually following your passing or move into long-term care.
Why Consider Equity Release?
- Home improvements or adaptions
- Paying off existing loans and debts
- Additional retirement income
- Later life care at home
- Helping family and friends get on the housing ladder.
Uses Of Equity Release:
Retirement is something to be celebrated and you deserve to enjoy later life.
- Releasing equity from your property can be an option to provide the financial means to enjoy your later years.
- We are living longer and longer which means later life financial planning is of increasing importance.
- Longer lives mean more freedom but less money.
- Many are finding that state and occupational pensions alone are not enough to allow them to live the life they want.
- While equity release is not suitable for everyone, for some it can be an effective way of using the funds tied up in their home to make a real difference to their quality of life.
A lifetime mortgage may impact your entitlement to means-tested benefits and the inheritance you may leave.
Types Of Lifetime Mortgage:
An interest roll-up mortgage
- You can receive either a lump sum or regular payments.
- Interest is added to your loan.
- You don’t need to make regular repayments.
- The total loan plus interest earned is repaid when your property is sold.
An interest-paying mortgage
- You borrow a lump sum.
- Repayments are made monthly or an ad-hoc basis.
- The loan is repaid when the property is sold at the end of the mortgage term.
Lump Sum
- A lump sum can be taken at the start of the mortgage term.
- Alternatively, a lower lump sum can be taken with a further drawdown facility
Drawdown or income
- Allows small amounts to be taken on a regular or periodic basis.
- Interest is only paid on the money actually borrowed.