Are you looking for a lifetime mortgage?
If you are a UK homeowner aged 55 or over, IMS Independent Mortgage Solutions may be able to help you access money tied up in your home.
While some lenders will refuse to let borrowers have a mortgage in retirement, we have access to plenty of lenders who will not only allow this but have competitive rates too!
The majority of people aim to reach retirement age mortgage free, but there are lots of reasons why you may be thinking about having a mortgage that runs into or even starts after your working days have ended.
- Do you want to purchase an investment property in order to top up your pension income?
- Do you want to release equity to fund home improvements / help loved ones on the property ladder / fund a once in a lifetime holiday / consolidate debt?
- Are you nearing the end of your current interest only mortgage and no means to repay it?
Whatever the reason, our experts are here to help you find the right solution for your individual needs.
What is a Lifetime Mortgage?
A Lifetime Mortgage is in essence an ‘Equity Release’ mortgage although rather than you signing over ownership of your home, the ownership 100% remains with you!
So with a Lifetime mortgage you can release equity. Equity is the market value of your home, less any outstanding mortgage or other debt secured against it. If you’ve lived in your home for a long time, you’ll have probably seen local house prices rise steadily, so the amount of equity you now have could be quite substantial.
‘Equity release’ means getting some of this money out of your home and into your pocket, without having to sell up and move out. You can continue to live in your own home for the rest of your life or until you move permanently into long-term care.
The top 5 reasons for releasing equity from your home are usually:
- To pay off an existing mortgage
- To fund garden / home improvements
- To boost income
- To fund holidays and large purchases
- To gift early inheritance or used as part of Inheritance Tax Planning
You can choose to ring-fence some of the value of your property as an inheritance for your family.
Some providers might be able to offer larger sums to those with certain medical conditions, or even ‘lifestyle factors’ such as a smoking habit.
The home still belongs to you and you’re responsible for maintaining it.
Interest is charged on what you have borrowed, which can be repaid or added on to the total loan amount.
When you die or move into long-term care, the home is sold and the money from the sale is used to pay off the loan.
Anything left goes to your beneficiaries. If your estate can pay off the mortgage without having to sell the property they can do so.
If there is not enough money left from the sale, your beneficiaries would have to repay any extra above the value of your home from your estate.
To be eligible for equity release you must be aged 55 or over with a UK home worth at least £70,000. Minimum age, property value and property criteria vary between providers
Different Types of Lifetime Mortgages:
- An Interest roll-up mortgage: you get a lump sum or are paid a regular amount, and get charged interest which is added to the loan. This means you don’t have to make any regular payments. The amount you borrowed, including the rolled-up interest is then repaid when the house is then sold.
We will always ensure we find you a lender who will have a ‘no negative equity guarantee’ which means that you, or more specifically, your estate will never owe more than the property is worth when it is sold.
- An interest-paying mortgage:you get a lump sum and make either monthly or ad-hoc payments. This reduces, or stops, the impact of interest roll-up. Some plans also allow you to pay off capital, if you so wish. The amount you borrowed is repaid when your home is sold.
You can also decide whether you want the money as a lump sum or whether you want it to fund an income.
Our qualified experts can help you understand what option is right for you and ensure that you obtain the most competitive mortgage for your individual circumstances, please call us on 01869 248339 or email firstname.lastname@example.org where one of our lifetime mortgage specialists will be happy to help.
IMS independent mortgage solutions are a member of the equity release council