Lifetime mortgages are a way of releasing equity from a property and are exclusively available to homeowners aged over 55. That basically means they are a way of using the value of your home to free up money to do whatever you wish with it….
Lifetime Mortgage and Equity Release Advisers.
First things first, before you make any decisions, speak to a Qualified Adviser adviser; there is lots to consider before signing up. In fact, a specific qualification in Equity Release is required to advise on lifetime mortgages because they can be complex. This means your usual adviser may not be able to help you, however, we have qualified and experienced Lifetime Mortgage and Equity Release advisers available to help you.
What is A Lifetime Mortgage?
So, what is a lifetime mortgage and why would you want one? A lifetime mortgage is when a homeowner takes out a mortgage using the equity within their home. Taking out money based on the value of their property.
The amount you can borrow will depend on your age and can be affected by your health as well. As a general rule, lifetime mortgages are only available to people over the age of 55 and you can borrow more the older you are. The money can be taken all at once or in smaller payments through a ‘draw down’ option.
The way that a lifetime mortgage differs to other mortgages, is that the loan doesn’t need to be paid off until the homeowner passes away or moves into long-term care. However you can if you wish make voluntary Mortgage payments to the Mortgage. Some people pick this option if they want to slow or stop the the original borrowing increasing. Your Lifetime Mortgage Adviser will be able to explain this and other options available to you..
As a result, unlike a standard residential mortgage, the size of the loan increases as interest builds up. However, lenders within the Equity Release Council offer a “no negative equity guarantee”, which means you (or your next of kin) will never owe more than the property is worth.
The longer the mortgage is in place, the more interest will be added and these mortgages can carry hefty early repayment charges should you wish to repay it early. There are some lenders who allow you to pay off some, or all, of the interest during the loan( as discussed above), which helps prevent the loan from increasing in size. Do speak to your Equity Release adviser about how interest works with lifetime mortgages, as they will be able to explain the risks and options in more depth.
What Can I Do With The Money?
Taking out a lifetime mortgage is a way to turn the equity within your home into money that you can spend during later life, for example on the holiday of a lifetime, helping family, building an extension in fact anything you wish to spend money on.
It is something worth considering if you might be interested; however, you should also be aware that a lifetime mortgage will reduce the value of your estate, meaning less inheritance for your loved ones. Talk to your adviser to find out more about this and options to protect inheritance, if that is something you are concerned about…
Get In Touch If You Have any Questions
At Mortgage Adviser Glasgow, we will always discuss your needs in detail and always look at all options.We will advise you of alternatives to Lifetime Mortgage Mortgages if these are more appropriate for your needs. This is why it is important to discus your needs with a properly qualified Lifetime Mortgage Adviser
If you’d like to discuss lifetime mortgages in more detail, contact us now, use the call me back form or simply give us a call and our Lifetime Mortgage Adviser will only be too happy to help you
Michael Markey CeMap, CeRER. Lifetime Mortgage and Equity Release Adviser