It's estimated that the over 60's in the UK have around £600 billion of equity tied up in their homes – even though nearly half of all single pensioners are dependent on State Benefits?*
You've worked hard to create a home for yourself and your family over the years. Now, may be the time to make your home work for you. If you are over 60 (although one Provider will consider those aged over 55) you could soon be enjoying an enriched retirement thanks to a Lifetime Mortgage.
A Lifetime Mortgage plan allows you to release some of the value tied up in your home – and help you in your retirement. You must be a homeowner and you cannot have any outstanding mortgage loan when the plan is set up. Depending on age, you could receive up to 50% of the value of your home as a tax free lump sum to invest for income, Inheritance Tax planning, Long Term Care planning, paying off any debts, or simply to make your retirement dreams come true.
With this type of plan a legal charge is secured on your home and a tax free cash sum is provided, which you may spend as you choose. For as long as you live and so long as you continue to occupy your home, you need not make any repayments on the loan. Loan interest, at a fixed rate (unless an indexed rate is chosen), compounded annually, will be rolled up and added to the loan each year.
One of the decisions you will need to make is whether you require a cash lump sum, a monthly income provided by an Annuity or Investment or a mixture of both.
The Benefits
- Tax-free lump sum
- No monthly repayments:
No repayments are required until your home is sold, which is normally when you die or go into long term care.
- Guarantee against negative equity:
We only use Providers who are members of SHIP (Safe Home Income Plans), which means neither you nor your estate (family) will be left in debt from the sale of your property, even if its value decreases below the loan amount.
- Protect your status as a homeowner:
You will continue to own your own home and can live in it for the rest of your life.
- Further Loans:
Depending on the type of plan arranged, you may be able to drawdown additional cash payments in the future.
- Choice of plans:
Many providers offer a fixed interest rate or an index-linked interest rate; both types mean that you do not ever make any monthly repayments.
- If need be, you can move home and take the lifetime mortgage with you.
The Downside
- Once you enter into a Lifetime Mortgage contract, there are penalties applicable if you want to redeem the loan.
- By taking out a lifetime Mortgage you are effectively reducing the amount your family would inherit in the future.
- Some Providers charge fees when arranging a Lifetime Mortgage Plan.
Please Note
- We would not normally be prepared to arrange a Lifetime Mortgage plan for someone who simply wants to put the money in a normal savings account with their Bank, or other Investment, unless there are special and specific reasons
- This is a lifetime mortgage. To understand the features and risks, please ask for a personalised illustration
How to Apply
For free no obligation advice please either complete the online enquiry form or call us on the number shown or email us direct from our website.
We can then discuss if Equity Release (now called Lifetime Mortgage) is right for you, how much cash you might need and how much money from your property we can actually obtain as most Lenders use a percentage of your house value and also take into account the youngest age. As previously stated we only use Lenders who are members of SHIP and who therefore give the ‘no negative equity’ guarantee. You must be a homeowner when arranging equity release and when the application completes you cannot have an existing mortgage on your property. Although money raised by taking out an equity release plan can be used to pay off an existing mortgage. You can also use the money for what ever requirement you have, whether it’s to pay off debts, or take that holiday of a lifetime – it’s your choice.
If you want to arrange an equity release plan, now called a lifetime mortgage, please contact us and we can help you release cash from your property today with no repayments to be made until death.
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* Source – IFA promotion.
