By John Cossons, Equity Release Adviser.
I have recently helped several clients who have interest-only mortgages. They planned to repay their existing mortgage by downsizing. This means selling their existing property and buying something less expensive, to clear the mortgage. However, in the current property market, they have had problems selling the property in time and so had found themselves with no means to repay the mortgage.
What is the alternative to Downsizing?
The solution has been to stay put for the time being and release enough equity to repay the loan using a Lifetime Mortgage.
What is a Lifetime Mortgage?
A Lifetime Mortgage is a form of equity release. It allows you to take out a loan secured on your home which does not need to be repaid until you die or go into long-term care. This allows you to free up some of the wealth (equity) that you have tied up in your home. Lifetime Mortgages allow you to continue to live in your home.
Taking out a Lifetime Mortgage may seem counter-intuitive. Indeed, it would not have been good advice in the past due to the potential early repayment charges that would have been incurred. However, there are now several lenders who offer “Downsizing Protection”.
Downsizing Protection means that the lender will not charge any early repayment charges after a set period if the property is sold and the loan repaid. The option to transfer some or all the mortgage to the new property is also an option available.
How Anstee & Co can help you with retirement planning.
We are a firm of Independent Financial Advisers (IFA’s). This means that the financial planning advice we provide is unbiased. We will look at all the financial solutions that are available to you, not just Lifetime Mortgages.
Why not arrange a meeting today to see how we can help you. The initial “getting to know you” meeting is at our expense and is without obligation. Only when we have a full understanding of your situation and what you are trying to archive will we make our recommendation.
- Stamford, Lincolnshire
- London, Pall Mall
- Kettering, Northamptonshire
Additionally, our financial advisers live and make use of meeting rooms in: –
- Market Harborough, Leicestershire
- Bedford, Bedfordshire
- Northampton, Towcester, Wellingborough and Brackley in Northamptonshire.
These products are lifetime mortgages or home reversion plans. Equity released from your home will be secured against it.