At RM Mortgage Solutions we can refer you to an equity release specialist who will be able to provide advice and discuss your options for interest only lifetime mortgages in Birmingham.
An equity release interest only lifetime mortgage works on the same basis as an equity release lifetime mortgage. However, this time you are able to make regular payments on the interest that accrues over the lifetime of the loan.
When the plan comes to an end, this is usually when you and your partner pass away or move into long term care, any remaining interest plus the loan you originally took out would be paid back in full to the provider. The advantage of this type of plan means that the amount your provider takes at the end of the plan will be less, as you have already paid off some or all of the interest accrued.
Advantages of an Equity Release Interest-Only Lifetime Mortgage
- Paying off the interest each month means you reduce the amount your chosen provider will take from the property at the end of the plan
- 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.
- Some 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.
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Disadvantages of an Equity Release Interest-Only Lifetime Mortgage
- The amount you leave as an inheritance will be reduced. Some plans, however, enable you to protect a percentage of your property so you can secure an inheritance for your loved ones.
- If you wish to stop making interest payments earlier than planned, then you may be affected by the interest rate charged.
- 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.
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Before you consider an equity release scheme, please carefully read Is equity release right for you?.