Important Points To Consider When Looking Into
A Lifetime Mortgage
8 Important Points To Consider When Looking Into a Lifetime Mortgage
When considering a lifetime mortgage, it’s beneficial to know:
What Is The Minimum Age That I Can Apply For An Lifetime Mortgage?
The minimum age at which you can obtain a lifetime mortgage.
Normally it’s 55. We’re all living longer so the earlier you begin the more it is likely to cost in the long run.
What Is The Maximum Percentage Of My Home That I can Borrow?
You can normally borrow up to 60% of the value of your property. How much can be released is based on your age and the value of your home. The percentage typically increases according to your age when you take out the lifetime mortgage, while some providers might offer larger amounts to those with certain past or present medical conditions.
Are The Interest Rates Fixed Or Variable?
Interest rates must be fixed or, if they are variable, there must be a “cap” (upper limit) which is fixed for the life of the loan. This is a standard that is set by the Equity Release Council.
Can I Live In My Property For The Rest Of My Life?
You have the right to stay in your property for life or until you need to move into long-term care, provided the property remains your main residence and you abide by the terms and conditions of your contract. This is a standard set by the Equity Release Council.
Will My Family Be Left With Any Debt From My Lifetime Mortgage?
The answer to this is simply “NO THEY WONT”
The product has a “no negative equity guarantee”. This means when your property is sold, and agents’ and solicitors’ fees have been paid out, even if the amount left is not enough to repay the outstanding loan to your provider, neither you nor your property will be liable to pay any more. This is a standard set by the Equity Release Council.
Will I Have The Ability To Move Home In The Future?
You have the right to relocate to another property subject to the new property being satisfactory to your product provider as continuing security for your equity release loan. This is a standard set by the Equity Release Council. Various lifetime mortgage providers might have relatively different thresholds.
What Are My Options On Paying Interest On A Lifetime Mortgage?
If you can make repayments, the mortgage will be less costly. With a lifetime mortgage where you can make monthly payments, the amount you can repay might be based on your income.
What is the difference between lump sum and drawdown lifetime mortgages?
When you need it or whether you have to take it as one lump sum, whether you can withdraw the equity you’re releasing in small amounts as and. The advantage of being able to take money out in smaller amounts is you only pay the interest on the amount you’ve withdrawn. If you can take smaller lump sums, make sure you check if there’s a minimum amount.
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This is a Lifetime mortgage which may reduce the value of your estate and may affect your entitlement to state benefits. To understand the features and risks ask for a Personalised illustration.
Any information contained herein is a personal opinion of the author and should not be considered to be advice of any kind. Inheritance Tax planning is not regulated by the FCA. Think carefully before securing other debts against your home. By consolidating your debts into a mortgage you may be required to pay more over the entire term than you would with your existing debt.
Only if you choose to proceed and your case completes will Responsible Life Limited charge an advice fee, currently not exceeding £1,490. Our adviser will talk through the setting up costs of a lifetime mortgage before you make any decision to proceed.