If you take out a lifetime mortgage, you are taking out a loan secured on your home which does not need to be repaid until you die or move into long-term care.
Unlike other types of Equity Release scheme, your home still belongs to you but you are obliged to repay the loan when certain conditions are met – death, moving into long-term care or if the terms of the mortgage are broken.
The lender can give you a lump sum or you can withdraw funds in stages. Interest is paid on this amount on an on-going basis or the interest can be ‘rolled up’ and paid together when the loan is repaid.
The loan is repaid from the proceeds of your home when sold. If there is any surplus from the sale it would be available to your beneficiaries or estate. Many lenders offer a 'no-negative equity' guarantee which means that you would never have to pay back more than the value of your home.
As with all Equity Release schemes it is very important to get advice on whether the scheme is right for you. Please talk to us to find out more and ensure you get the advice you need.
As part of the advice process, consideration must be given to discussing proposed actions with family members given that the estate is likely to reduce in value. It is good practice to consider alternative means of raising capital such as downsizing, financial assistance from family members, the availability of grants and other forms of borrowing. Additional costs may be involved when entering into an Equity Release arrangement such as lenders arrangement, valuation and legal fees and these vary by lender. Once equity has been released, it remains your responsibility to maintain the property at your expense. Releasing equity from your home may affect any entitlement to state benefits.
It is essential that independent legal advice is sought prior to completing a release of equity from your property.
This is a lifetime mortgage. To understand the features and risks, ask for a personalised illustration.