Equity Release Lifetime mortgages are proving to be an increasingly popular way for people to raise cash to fund their retirement years. A lifetime mortgage gives a person the opportunity to release a cash lump sum from their home to spend as and how they wish, with typically no monthly repayments to meet.
Interest accrues on the loan at a fixed rate each month. The loan plus the accumulated interest are repaid in full when the property is sold usually upon your (and your partners) death, or entry into long term care.
Advantages of an Equity Release Lifetime Mortgage
- There are typically no monthly repayments to meet.
- You retain full ownership of your property.
- If the property increases in value; your estate will still benefit from this.
- There is an option to repay the loan at any time.
- The cash lump sum is yours to spend as you wish.
- Some lifetime mortgages allow you to guarantee an inheritance.
- SHIP plans come with a “no-negative equity” guarantee to ensure the amount you owe will never exceed the value of your home. This means that there will never be any debt left for your loved ones to pay when you pass away.
Disadvantages of an Equity Release Lifetime Mortgage
- The amount you leave as an inheritance is reduced. Some plans, however, enable you to protect a percentage of your property so that you can secure an inheritance for your loved ones.
- If you decide to repay the loan early then an early repayment charge may apply.
- Your entitlement to state benefits may be affected. However, an equity release specialist will be able to review your situation in more detail and tell you whether there will be an impact or not.
Further information about a lifetime mortgage can be given to you over the phone or within the comfort of your own home if you live in or around the Birmingham area. Your advisor will be able to tell you which type of equity release scheme will work best for your individual circumstances, or whether it is in fact right for you at all.
At RM Mortgage Solutions Ltd we can refer you to an equity release specialist who will be able to provide advice and discuss your options further. Book an equity release appointment today.
Before you consider an equity release scheme, please read Is equity release right for you? carefully.
A lifetime mortgage is a loan secured against your home. To understand the features and risks, always ask for a personalised illustration.