Equity Release Mortgages
Equity Release Mortgages
An Equity Release Mortgage allows you to release an amount which is locked up in your home for home improvements, pay off some debts, a special holiday or family commitments or just for you to live on.
Who is it aimed at?
Its tailored for the over 55s and retired people whose main asset is their property but are cash poor and wish to remain living in their home.
Are there any special requirements?
Most Lenders will only consider you if you have a very small amount left on your mortgage or no mortgage at all. Also they require that whatever is left on the mortgage is paid off with part of the equity release payment or by yourself paying it off with your own funds.
How expensive is this option?
When this has been achieved the Lender will agree a loan and will then charge interest at a rate which is in line with current interest rates.
Is it safe?
At one time people were quite wary about equity release, but as we are now living longer this form of mortgage is becoming more popular and is now a safer option, as it is regulated by the (FSA) Financial Service Authority.
Are there any drawbacks?
Interest is charged on the full amount of the loan plus any interest that has already accumulated and this can make the amount you owe grow quite quickly and as this type of mortgage is based on a long term commitment if you later decide to pay it off early the charges are quite high.
Can this loan be tailored to suit me?
There are also other different options like getting a lump sum and not paying anything back, so the loan plus interest are repaid when you die or go into long term care and the property is sold, or taking a smaller amount at the start of the mortgage with an option later on to use another amount when needed.
We provide specialist advice ideal for these situations.
With these different options to consider you need proper advice especially if you have a family and in your Will you intend to leave the property to be divided up between family members as the value of the property would be a lot lower after the mortgage has been paid, which could cause problems.
Contact us using the form above.
It is therefore extremely important to seek proper advice from an experienced advisor who will explain the risks, costs involved and also that it will reduce your inheritance.