Lifetime Mortgages

If you're a homeowner aged 55 or over and your home is worth at least £70,000, taking out a Lifetime Mortgage can be useful in controlling your later life finances.

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What is a Lifetime Mortgage & how can it help?

A Lifetime Mortgage is a form of Equity Release. Equity is the difference between the amount left on your mortgage balance and how much your property is worth.

Equity Release is a useful tool for later life homeowners looking to give themselves a financial boost, utilising the equity that has gradually built up in their home.

So long as you are a homeowner over the age of 55 and have a property that is worth at least £70,000, you can release any stored equity from your home, tax-free, without even needing to move and find a new place to live.

There are lots of reasons why later life homeowners may look to take out a Lifetime Mortgage to release equity.

This includes to fund a nice retirement for themselves, to repay a current mortgage balance, to fund a wedding or something else. You don't have any restrictions, it's your money to spend as you see fit!

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What are the different types of Lifetime Mortgages?

A Lifetime Mortgages will either be available as a Lump Sum Lifetime Mortgage or as a Drawdown Lifetime Mortgage.

A Lump Sum Lifetime Mortgage allows you to release the equity from within your property, free of tax, into one big lump sum.

You will retain complete ownership of your home, having absolutely no need to make monthly repayments, and no restrictions on how you can spend your money.

A Drawdown Lifetime Mortgage works in a similar fashion, but instead only releases a portion of the equity, giving you a choice of drawing out additional equity as and when you need it.

This actually reduces the overall cost of your Lifetime Mortgage, as you're only charged interest on what you draw out. This could save you a lot of money!

The qualifying criteria for each of these types of Lifetime Mortgage is the same as each other.

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Lifetime Mortgages FAQs

What is a Lifetime Mortgage?

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The most common type of Equity Release is the Lifetime Mortgage. With a Lifetime Mortgage you can release money as a loan secured against the value of your home.

You retain ownership of your home in the same way as with a conventional mortgage. The lender needs to be repaid, generally from the sale of your home, after you either die or move into long-term care.

Am I eligible for a Lifetime Mortgage?

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You may be eligible for taking out a Lifetime Mortgage, so long as you are over the age of 55 and have a property that is worth at least £70,000.

Is a Lifetime Mortgage right for me?

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Maybe. The role of a qualified Equity Release Advisor is to spend time getting to know you, your plans and your hopes for later life.

We will explore the alternatives available to you and look to provide the best value solution for your needs in the long term. We encourage family to be part of these discussions, but that is always your choice.

Rest assured that if Equity Release is not the best option for you, your Equity Release Advisor will tell you and either provide an alternative solution, or refer you to another professional who can.

How much interest do I pay on Equity Release?

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The interest rate is determined mainly by the amount you are borrowing as a percentage of the value of your house and the age of the younger borrower, although other factors can have an impact. Interest rates are generally fixed for the life of the loan.

Repayments of just the interest or larger sums are optional with most Lifetime Mortgages, meaning that you can pay what you can afford to reduce the amount of interest adding to the loan.

If you don’t make any repayments, the interest will add to the loan and compound, meaning the amount of interest will be more each year, as you would be paying interest on the interest already added.

This will increase the debt against your home, which means there will be less for your beneficiaries or for you to use for later life costs, such as paying for care.

How much equity could I release?

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The amount of equity that you are able to take out with your Lifetime Mortgage will depend on factors such as your age, health and lifestyle choices, as well as how much your property is worth. According to research from Equity Release Supermarket*, their customers released an average of £113,000 worth of equity in 2021. (*Source: Equity Release Supermarket)

You will need to release a minimum amount of £10,000 of equity, with the total amount varying based on the factors listed above. The older you or your partner are, the higher amount of equity you could release from your Lifetime Mortgage.

How much does a Lifetime Mortgage cost?

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The costs of a Lifetime Mortgage depends on a variety of factors. These include how much equity you're looking to release, your age, how long you would like your plan to last, the interest rates attached to the plan and the ways in which you would like to personalise your Lifetime Mortgage.

Much like a regular mortgage, there will still be additional costs to factor in, such as a surveyor's fee, solicitor's fee and a mortgage broker fee, set at the discretion of your dedicated mortgage advisor.

What if I need more money later?

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If you know from the start that you may need more money in the future, it is important to talk about it with your Equity Release Advisor, as it may be possible to arrange a cash reserve facility which gives you easy access to more money in the future.

If you have a Lifetime Mortgage with no cash reserve, you may still be able to get a further advance from your lender.

This must be arranged with a qualified Equity Release Advisor, who will also compare the available plans on the market to see if you would be better off with a further advance, or moving your Lifetime Mortgage to a different plan.

Can I move home if I have an Equity Release plan in place?

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Lifetime Mortgages are portable! If you want to downsize at a later date, you can generally move your mortgage to the new property subject to the lender’s terms and conditions.

If this is a possibility, you should talk to your Equity Release Advisor in depth about your plans to make sure you’ve got the flexibility you want.

Lifetime Mortgages can also be used to buy a house. Many people want to move to be nearer family but can’t due to property prices, a Lifetime Mortgage could help you raise the extra funds you need.

What are the benefits of Lifetime Mortgages?

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There are lots of benefits to Lifetime Mortgages. One of the main benefits to this, is that whilst you can go ahead and make monthly mortgage payments if you would like to, you can simply just let the interest roll up, meaning you won't have any monthly payments.

Once you have passed away or have moved into long-term care, your property will be sold in order to pay off the mortgage balance.

Once I have a Lifetime Mortgage, am I stuck with it?

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Firstly, a Lifetime Mortgage is designed to be a long-term solution and changing it once in place can be expensive.

It is, however, worth reviewing your Lifetime Mortgage on a regular basis, as a small drop in interest rates can make a big difference to the cost of the loan in the long run. An Equity Release Advisor will be able to give you an analysis of potential savings, including all costs.

If you want to repay your Lifetime Mortgage, (for example, because you have received an inheritance) you can at any time, however, there may be penalties.

It is important to consider all likely future events when speaking to your Equity Release Advisor as it will help them to recommend a product which remains as flexible as possible to take your plans into account.

What are the different types of Lifetime Mortgages?

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Lifetime Mortgages can either come as a Lump Sum Lifetime Mortgage or a Drawdown Lifetime Mortgage.

A Lump Sum Lifetime Mortgage works as the name suggests, allowing for you to release your funds, tax-free, into one big lump sum. This allows you to retain complete ownership of your home, without the need to make monthly repayments, and no restrictions on what you can use it for.

A Drawdown Lifetime Mortgage works similarly, but instead only releases part of the equity in your property, giving you the option to draw additional equity from the property as and when you need it. This actually reduces the overall cost of your mortgage, as interest is only charged on the amounts you draw out, which could save you a lot of money!

The criteria to qualify for each of these types of Lifetime Mortgage is the same as one another.

Is there anything else I need to do for Equity Release?

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Apart from speaking to an Equity Release Advisor about whether Equity Release is right for you, it is worth thinking about other arrangements which can be made for the future.

We strongly recommend talking to your family about Equity Release, bringing your will up to date and arranging lasting powers of attorney.

These are all important as, often, it is your family as beneficiaries (after your death) or attorneys (if your mental capacity is impaired) who will have to sell the property to repay the Lifetime Mortgage.

It is like everything else, proper planning now makes things easier, and generally cheaper, later.

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We work to a time that suits you. You can put your personal life first, attending your free lifetime mortgage appointment at a time convenient to you.

Free initial lifetime mortgage appointment.

During your free lifetime mortgage appointment, we can go over your options with you.

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Your case manager will support you every step of the way!

We work for you, we have your best interests at heart.

We will be open and honest at all times; finding you a deal that suits your personal and financial situation.

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We'll recommend the most suitable insurance products to protect you and your family, should you become seriously ill or unable to work.

Searching through your lifetime mortgage options.

We will compare different lifetime mortgage deals across the market. We have a large panel of mortgage lenders to choose from.

We are dedicated and experienced.

We have been in the mortgage industry now for over two decades. If you need help with lifetime mortgages, get in touch!

From the start until completion.

We will be there for you throughout your whole mortgage process, recommending the best lifetime mortgage deal for your situation.

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