Is a lifetime mortgage right for me?
An equity release mortgage could help you and your family in many ways, be it to live a lifelong dream or just make life that little bit more comfortable financially.
For example you may want to:
Make home or garden improvements – You may want a new kitchen, conservatory or patio. Maybe you would like to adapt and future proof your home by making it more accessible, so you won’t have to worry about moving in years to come, perhaps when the stairs get a little difficult.
Pay off outstanding debts or loans – If you still have a mortgage outstanding, you may want to choose a lifetime mortgage to clear the outstanding balance. Having an existing mortgage doesn’t mean you won’t be eligible for equity release; you will just need to pay off your mortgage first with the money you have released and then the remaining cash sum will be yours to do what you want with.
Help your family – The cost of living and raising a family can be so expensive these days, so you may opt for a so called ‘early or living inheritance’ by using equity release to help your family get on the property ladder, assist with education, raising grandchildren or perhaps use towards wedding fees.
Enhance your retirement income – As a nation we are living longer lives, which in turn means that our retirement years could be longer too. Using an equity release mortgage therefore could help supplement your income and boost your pension pot or savings, to help make your retirement a little easier.
Enjoy life – You may just decide you want a lifetime mortgage so you can get that one thing you have always wanted or treat yourself to a luxury holiday, new car, caravan or motor home.
Whether a lifetime mortgage is right for you will depend on your personal situation. An equity release mortgage will affect any inheritance you wish to leave for family and could affect any benefits you receive, so it is not a decision to take lightly.
Other options may be available to you that could help such as downsizing but a specialist like Age Partnership can talk you through your options and answer any questions you may have on how to release equity from your home.
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Are lifetime mortgages safe?
Lifetime mortgages are tightly controlled and regulated by the Financial Conduct Authority (FCA). In addition to the FCA, it is important to choose a provider that is a member of the Equity Release Council (ERC), so you can be certain the following safeguards are in place to protect you:
- All lifetime mortgage interest rates are fixed, or if variable, that there is an upper threshold that is fixed for the life of the loan.
- You have the right to remain in your property for life, or until you move into long term care.
- You have the right to move to another property subject to the new property being acceptable to your equity release mortgage provider.
- You are covered by the all important ‘no negative equity’ guarantee, which means that you will never owe more than the value of your home. Therefore if after the house is sold and the solicitors and agents fees have been paid there are insufficient funds to repay the loan, neither you nor your estate will be liable for any additional payment.
Therefore with the watchful eye of the Financial Conduct Authority and the seal of approval from the ERC, you can be sure that your lifetime mortgage is secure and that you are in safe hands.
To read about other popular lifetime mortgage misconceptions, take a look at our common equity release myths.