Are you thinking of releasing capital from your home?
We believe Equity Release has an important role to play in the future for older homeowners’ finances. The gap between the resources currently available or earmarked for the retired population, and amounts needed to provide a comfortable retirement are well documented. For those individuals with a shortfall in retirement funding but who have equity in their property, Equity Release / Home Reversion Schemes, offer the opportunity to bridge the gap.
In the past Equity Release has had quite a negative image – and rightly so. There have been some shocking scandals and a number of older people have been cheated within this area. As a result of this, a lot of people are very wary of it as an option.
More recently a lot has been done to regulate Equity Release Schemes. Both types now fall under the jurisdiction of the FSA, which offers you as a customer some added protection, and an organisation to help you, should things go wrong.
There is also Safe Home Income Plans (SHIP) – an organisation that has done plenty to improve the image of Equity Releases. They are a self-governing body, but they do enforce a code of conduct on their members – which means more protection for you. We only use SHIP approved providers. There are flexible Equity Release Schemes now available, which allow you to release capital when required.
We try to keep everything under one roof, so we can also arrange adequate safeguards to ensure your mortgage can be re-paid in the unexpected event of financial hardship or sickness for example. Click here to find out more about our Life Insurance advice.
Equity release for house purchase – Schemes for those over 55 years of age
- Want to move, need to move, family needing deposit monies for purchase?
- No savings? Unable to get a mortgage? Monthly direct payments a no, no?
All sounds too familiar? We have new styles of mortgage that will help with purchase to cover any shortfall or just to release equity to help with a purchase. So by being that little bit older now helps, secure funds.
Recently we have received several enquiries from older clients looking at ways they can purchase a property.
Many of these clients are retired or at the point of retiring and wish to purchase a property to suit their lifestyle, which may be a bungalow or a property nearer to family for example. As you can appreciate, funding such a purchase for some clients can be a challenge, as conventional mortgages may be difficult to obtain due to age or affordability.
For those in this bracket we’ve looked at alternative options and using Equity Release via a lifetime mortgage to help borrowers make this purchase.
In simple terms, a lifetime mortgage is an interest only loan secured against the property, with the borrowing having the option of making interest only repayments should they wish to or if they choose not to service the interest, allowing it to be added to the loan on a compounding basis.
An income and affordability assessment are not an essential requirement when securing this type of finance as loans are typically determined by the clients age, health and value of the property in question.
The client would have ownership of the property in the same way as they would with a conventional mortgage.
Key points:
- Borrowers must be aged 55 or over to take out a lifetime mortgage
- They must live or plan to live permanently in the property
- Any existing mortgages/secured loans on the property will need to be cleared as part of the process
We have Advisers that can meet with you
And give you all the necessary information and details of schemes that fit your circumstances. To understand the features and risks, we will provide a personalised illustration and check that the mortgage will meet your needs if you want to move or sell your home or you want your family to inherit it. If you believe this is an area of which you would like more information or wish to discuss your situation, please do not hesitate to contact us.