Lifetime Mortgages and Equity Release
Lifetime Mortgages and Equity Release loans are aimed specifically at retired homeowners who wish to unlock some of the capital tied up in their property.
Such loans include ‘interest only’ arrangements, where a mortgage is arranged for an indefinite term and during which time payments of interest only are required. The debt is not normally repaid until the property is eventually sold either by choice, or upon the death of all borrowers.
A variation of this type of mortgage is the ‘roll up’ interest scheme, whereby the interest charged on the loan is not actually paid but is instead added to the original debt. The total amount owing therefore increases as time goes by, but again repayment of the outstanding loan is normally only required when either the borrowers leave the property to enter residential or nursing accommodation, or the property is sold by choice or upon the death of the homeowners.
Another method of releasing some of the capital is by use of a full or part ‘Reversion’ scheme. This involves the sale of part or all of the property for an amount that is less than the true market value, but in return the seller retains the right to lifelong occupancy without any payments or debt. The seller therefore becomes a tenant but with no rent payable. Upon the vacation of the property, it is sold and the purchasing company realises the investment it has made.
The use of these schemes can present emotive issues, and expert advice from qualified professionals is essential. At T&R we work closely with you and your own Solicitor to fully explore all of the implications, costs, benefits and potential drawbacks of using your home to improve your retirement. Please contact us for an appointment to discuss your options.
We will only recommend schemes provided by members of SHIP (Safe Home Income Plans). Please Note; this link will open in a new browser window. By selecting this link you are leaving the Thompson & Richardson Financial Services website and entering the website of SHIP a body that exists to safeguard the interests of retired applicants. Membership of SHIP means that the provider guarantees that you will never owe more than your property is worth.
There may be a fee for mortgage advice. The precise amount will depend on your circumstances but we estimate that it will be 0.5% -1% of the mortgage with a minimum fee of £500.
Your home may be repossessed if you do not keep up repayments on your mortgage.
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