Your home may be repossessed if you do not keep up repayments on your mortgage
Equity Release
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1. AS AN ALTERNATIVE TO DOWNSIZING
Many simply don’t want to sell the family home, with the emotional attachment, comfortable living, a settled environment and established local network. Further, poor selling conditions and a lack of supply of property to move to make this simply unappealing, if not impossible. Lastly the cost and hassle factor are enormous. All of these can be overcome via equity release. However, if you chose to (or need to) downsize later in life your options on suitable properties may be limited as a result of the loan and accrued interest.
2. THE BANK OF MUM AND DAD – GIFTING AN EARLY INHERITANCE
It’s not news that it’s very challenging for the young to get their first step on the property ladder nor that private schooling remains very popular. A Lifetime Mortgage enables funds to be released either for a deposit on a property or school fees for children or grandchildren.
3. FUNDING A MORE COMFORTABLE LIFESTYLE
Many find their wealth tied up in the equity in their property. Unless through a dramatic downsizing operation, this can create a sense of being asset rich: cash poor.
Whilst releasing funds from your property will potentially reduce the size of a beneficiary’s inheritance, most beneficiaries would wish their family to enjoy a prosperous retirement.
4. BUYING A SECOND HOME OR HOLIDAY HOME
Why not? Whether it is to escape the UK winter climate, a city at for more cosmopolitan living or a country/seaside retreat, many release funds tied up in their main residence to expand their horizons in retirement.
5. HOME IMPROVEMENTS
In addition to all of these reasons, many people look to raise additional funds to enhance their current property and have time to enjoy the bene ts of those home improvements.
6. CLEARING DEBT, MORTGAGES, OR INTEREST ONLY MORTGAGES
Replacing an old residential mortgage with a Lifetime Mortgage can extend the term beyond traditional limits of age 65 / 70. Further, it provides a solution to interest only mortgages, loans and other debts that cannot be repaid and still could allow capacity for further funds to be released for other purposes mentioned here.
Although consolidating debts in a Lifetime Mortgage may reduce the regular outgoings to make them more affordable, it is likely to mean that you will be incurring interest on the loans for a longer term and are likely to pay a greater amount over the term of the debt – particularly if you choose to roll- up the interest on the loan
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
EQUITY RELEASE WILL REDUCE THE VALUE OF YOUR ESTATE AND CAN AFFECT YOUR ELIGBILITY FOR MEANS TESTED BENEFITS.
