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Lifetime Mortgages and Equity Release

As house prices have risen in recent years, and interest and annuity rates have declined, specially designed equity release schemes have become popular. These schemes work by lending you a cash sum against the value of your house which is paid out either as a monthly income or a lump sum.

In these specially designed schemes, the loan is paid back when the house is sold, either on death or if you move house. Generally, you pay no interest during your lifetime; instead, this is added to the loan until the end of its term, allowing you to stay in your home whilst benefiting from its value.

You will also reduce, or perhaps even cancel out the value of the house that you might have wanted to pass to your beneficiaries.

Key Considerations

  • The interest is compounded, normally monthly, which can increase the outstanding loan significantly in latter years
  • Could provide useful income if you do not intend or do not wish to sell your home
  • In some circumstances, this could form part of your inheritance tax planning
  • Can be used to provide funds for your children/grandchildren as a deposit for their own home
  • The money released can be used for any purpose and if you have no dependents, you can gain access to some of the value of your property during your lifetime

Our Key Skills

We often work with you and your dependents to provide a structured recommendation designed to suit your needs. Most of our work in this area takes into account your whole family, as lifetime mortgages will affect the future available inheritance available to your dependents.

We provide clear and understandable information, so that the full effect of the interest roll-up is outlined at the earliest stage. We also consider options to avoid where possible any detrimental effect on any State Benefits you may be receiving now, or may become entitled to in future.

We will explore all alternative options with you and because we understand how daunting the process is, we meet with you, and your family if required. We will not proceed with any application, until we are satisfied that you fully understand the implications inherent in this type of transaction.

Finally, we support the Safe Home Income Plan (SHIP) standard for these loans. We hold advanced certificated qualifications within this area to enable us to provide straightforward advice.