Lifetime Mortgage

A lifetime mortgage is a loan secured on the property. It can be taken as a lump sum or drawn down in segments.

Where it has been taken as a lump sum, you can choose to make interest payments each month or compound interest is added to the loan value over the term of the loan and paid when the house is sold.

The hope is that house price growth will offset the interest, but whether this occurs or not, the no negative equity guarantee prevents the loan value exceeding the value of the house. The Guarantee is only available with providers who have a membership with the Equity Release Council (formerly SHIP). These are the only products we recommend.

Under a drawdown arrangement, a maximum loan amount is agreed at the outset and segments of it are drawn as needed. This means that interest does not roll up on the entire loan amount, but only on the part that has been drawn down. This can help reduce the effect of compound interest and can be particularly useful if it is known that some of the money will be needed at a future date, not immediately. No payments are made each month and are therefore “Rolled up”.

The mortgage will become payable when the house is sold or the surviving individual enters into Long Term Care.

Call us and speak to one of our friendly qualified advisers today for more information.

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Home Reversion Plan

Home reversion involves the sale of all or part of the owner’s beneficial interest in the property to the provider, while retaining the right to remain in it for life.

There is no interest, as a percentage of the beneficial interest in the property is sold to the provider.

The provider owns a share of the property and any of its increase in value. If the property prices increase significantly, this can mean that a large sum is taken by the provider upon the death of the client. A lack of understanding of this point has led to some criticism of home reversion schemes in the past.

Please note, this is not an area we assist with and is for information purposes only.

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Retirement Interest Only Mortgages (RIO)

A RIO mortgage can help you to purchase a new property or remortgage against your current home to refinance an existing mortgage or provide you with a lump sum which can be used for several reasons.

With most RIO mortgages, you only repay the loan when you sell your property, move into residential care or die, as with a lifetime mortgage, however, some retirement-interest only mortgages carry terms like a regular mortgage. This means you either pay them back after a set number of years or when you reach a certain age. This type of arrangement with an agreed term can be suitable if you have a lot of equity and wish to downsize in the future but want to be able to raise capital for a current need.

Call us and speak to one of our friendly qualified advisers today for more information.

CALL US ON 01489 580020