The most common form of equity release, a lifetime mortgage, allows you to release money by securing a loan against the value of the your home that only needs to be paid off once the last surviving homeowner dies or moves into long-term care.
In most respects, a lifetime mortgage works in the same way as the conventional mortgage that you may have had – or may still have – on your home.
However, many lifetime mortgages don’t require you to make payments and the loan can be repaid on the final plan holder’s passing away or moving into long term care.
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A lifetime mortgage offers many features and benefits, whether you’re looking for fixed rates, least impact on your estate or a free property valuation. Your Adviser will want to understand what’s important to you.
Regular repayments during the term of the loan are an option rather than a requirement, so there are no formal affordability checks for most plans.
If you don’t make repayments the interest will roll up over time. This will increase the size of the debt and reduce the amount that will be left to your beneficiaries when you’re gone.
The no-negative-equity guarantee, which comes with all plans, means that your estate will never have to pay back more than your home is worth provided it is sold for a reasonable price.
Additionally, you can choose to protect a share of your home’s value in order to guarantee an inheritance for your loved ones.
Lifetime mortgages are portable, meaning that you can move house and take the loan with you subject to your new home meeting the lender’s criteria.
With a lifetime mortgage, you know that the interest rate you will pay can be fixed for life, no matter how long you live. This means that even if rates were to increase over the years, you would continue to benefit from the rate you secure today.
If new plans or interest rates were to become available in the future, then just like with a standard mortgage you have the ability to switch onto a new deal.
This will depend on whether you qualify for the latest plan developments, the amount outstanding (including any interest accrued) and any potential early repayment charges that may be applicable. We would recommend reviewing your plan after 12 months. You should speak to an Equity Release Associates Specialist for full details – they will only recommend you switch plans if it’s right for you.
Part of our job at Equity Release Associates is to help you to make an informed choice about releasing equity.
Our Specialists are not only experts in equity release but are also able to help you consider a range of alternative solutions you may not have thought about. At the end of the day all that matters to us is what’s right for you. So if we think your needs would be better met by something other than equity release – such as any grants you may be entitled to or other forms of finance – we’ll tell you so.
However, if equity release is your best option, we’re superbly positioned to get you the best deal for your circumstances. Our specialist advisers are able to offer a whole of market service – meaning that they give you access to plans from across the market.
In short: we want our customers to get nothing but the best.
The initial consultation and recommendation from our Specialists is totally free of charge and there’s no obligation to proceed. If you do decide to go ahead then a fee of £1,695 will be payable when your case completes.