How can you join the thousands of people over 55 releasing equity in their own homes?
You could raise immediate TAX-FREE cash with the option of no monthly payments allowing you to:
- Pay off an existing mortgage
- Fund new home improvements
- Plan your inheritance
- Tackle your low pensions
- Financial support for your loved ones
- Take a holiday
- Help a family member on the property ladder
- Or more!
What are equity release and later life mortgages?
Lenders typically require a mortgage to be repaid by the time the applicant reaches retirement. Equity release and lifetime mortgages are mortgage products which allow an individual homeowner over the age of 55 to obtain a large cash lump sum of money or a regular stream of income, depending on the value of their residential property.
Instead of making payments to pay off the loan, the loan will be repaid from the property’s value, usually on sale, and not until the homeowner passes away.
With an equity release mortgage, there are usually no monthly payments to make, as the cost of the loan interest is also deducted from the sales proceeds. The amount that can be borrowed is a percentage of the property’s value. The older the applicant/s is, the higher the amount that can be borrowed.
With a later life mortgage often also referred to as an RIO mortgage (Retirement Interest Only) you will make monthly payments of the cost of the interest. The benefit is that you may be able to borrow more, particularly if you are of a younger age, but you will need to show you have sufficient income to meet the payments.
At Connect we are passionate about finding our clients the best deal and do so by having access to a wide range of both equity release and later life lenders, unlike some companies who only offer one or the other. For help in evaluating your options, contact a specialist adviser now.
CASE STUDY
“..Mr and Mrs M in their early 70s had an interest-only mortgage with a term coming to an end. They had limited income from pensions and wished to remain in the current family home. We were able to find a provider that was prepared to lend just under 50% of the property value which released enough funding to repay the existing mortgage loan as well as repay some personal debt. This reduced monthly outgoings for Mr and Mrs M by nearly £1,600 per month and meant that they were able to stay in their current home..’’
Equity release plans are not right for everyone and it is important that you fully consider your options and receive impartial financial advice before making a decision. It is also important that, if you do decide to use an equity release product, you need to be sure it is one that meets your needs.
If you would like to end your lifetime mortgage early, then you may have to pay a substantial early repayment charge.
A professional adviser can help you to choose the plan that is right for you. To understand the features and risks, ask for a personalised illustration.
