Introduction
Most people who take out Equity Release use a Lifetime Mortgage*. Lifetime Mortgages differ from lender to lender and we provide you with full advice and make recommendations to you, taking time to understand your circumstances.
What is a Lifetime Mortgage?
A Lifetime Mortgage is a loan secured against your home, providing you with a tax-free sum that you can take all at once or in smaller amounts. Taking smaller amounts may incur different interest rates, depending on the rates available at the time.
What can I use it on?
It’s entirely up to you how you spend the money that you release from your property. Whether it’s home or garden improvements, helping a family member onto the property ladder, supplementing your pension income or repaying an interest-only mortgage debt.
What are the risks?
Equity Release is a big decision and there are many factors to consider, especially if securing debt against your home. For this reason, it is only possible to get a lifetime mortgage through a lifetime mortgage adviser.
Lifetime Mortgages have evolved rapidly in the past ten years, introducing more safeguards and greater flexibility. With the many different options now available, we will take the time to understand your circumstances before providing you with full advice and making a recommendation.
*This is a lifetime mortgage. To understand the features and risks please ask for a personal illustration.
Advantages
You still own your home: Your home remains legally yours until it is sold once you or your partner pass away or move into long-term care
No negative equity guarantee: Providing your house is sold for the best price possible, you will not pass any debt onto your estate or family when you pass away or move into long-term care
Options for withdrawal and repayment: It is possible to either take a one-off cash sum, or a smaller lump sum and cash reserve to draw from. You only pay interest on the money withdrawn and repayments can be made. Further details are available from our advisers
Tailored interest rate: The interest rate is tailored to each individual equity release application, therefore you’ll always get a fixed rate that will never increase
Inheritance guarantee: You can protect a percentage of your home’s value as an inheritance for your loved ones. This may, however, reduce the amount you can borrow. Further details are available from our advisers
Disadvantages
Reduced inheritance: Whilst you can protect a portion of your home’s value as inheritance, its sale goes towards paying off your lifetime mortgage, therefore the amount you can leave as inheritance will reduce
Potential impact to tax and welfare benefits: Equity release can change your tax status and potentially affect eligibility for welfare benefits. Our advisers will explain the impact to your personal situation
Added interest: Interest is added annually to both your loan and interest already added, which increases the amount you owe. Everything is repaid from the sale of your home, once you pass away or move into long-term care
Lifetime commitment: If you decide to end your lifetime mortgage early, you may have to pay an early repayment charge
Examples of how Equity Release can work:
Mr & Mrs B, aged 60 & 62
Borrowed £106,950 against their property valued at £345,000. With no children to provide for, they used this money to carry out extensive renovations and provide an income. The lifetime mortgage had a no negative equity guarantee and fixed rate of 5.37%. The funds were released within 4 weeks from the offer being made.
Mr & Mrs G, aged 74 and 82
Wanted to buy a new car, boiler and go on holiday. Having spoken to their children, who were happy with their choice, they borrowed £30,000 against a property worth £285,000 with additional draw down available of £60,345. The lifetime mortgage had a no negative equity guarantee and fixed rate of 3.64%.
Mr & Mrs W
Wanted to move to a new property, as the running costs of their existing period property were proving to be too much. They borrowed £229,250 to buy a property worth £655,000.
Brancaster House’s typical fee for a lifetime mortgage is £1890; additional lender fees may apply.
Comentarios