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Equity Release

Do you have an interest only mortgage?

If the answer is yes then it will have an end date when the capital is due to be repaid to the lender. Most of these mortgages were sold on the pretence that sale of property will be used to clear the loan. Generally, these were issued before the crash in 2008 and now are hard to come by following tighter mortgage regulation.

However, most people feel settled in their home if they have brought up their children there and don’t wish to move to another house when they get in to their later years. The thought of downsizing is not appealing in you live in a four-bedroom detached home in a quiet area and have to move to a smaller property on a busy road.

There is an alternative to moving and that’s taking out a lifetime mortgage. These types of mortgages are not time sensitive and are repaid on death or if the occupants move in to long term care. Payments on the loan can be made monthly, annually or the interest can be rolled up.

Providing you are over the age of 55 and you own your own property you would be eligible. There are no affordability checks as repayment of interest is optional and current rates of interest are lower than 4%.

The plans are based on two factors, your age and property value. Your existing residential mortgage must be paid off by the lifetime mortgage to allow the plan to go ahead. The growth in this type of financial planning is becoming very popular as people are living longer and wish to enjoy their retirement years without financial worries or the thought of having to sell the family home. www.release-my-equity.co.uk

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