Lifetime Mortgages

Lifetime Mortgages

Lifetime Mortgages  

Lifetime mortgages equity release schemes. They enable a borrower to receive an income from a mortgage, on the condition that the mortgage, along with interest, is paid back at the end of the arrangement. The arrangement may be terminated at the event of the death of the borrower, or under the circumstance that the borrower has been admitted to a full time care institution. Lifetime mortgages are only available to mature individuals, beyond the age of 55. Our specialist advisers are dedicated in finding the most suitable and cost-effective lifetime mortgages for our clients.

There are three key schemes associated with lifetime mortgages, the first being interest only lifetime mortgages. The borrower pays the mortgage back at the end of the arrangement, however monthly costs of interest are charged, which either vary month-to-month or remain at a fixed rate.

Interest only lifetime mortgages may be of some benefit, particularly to younger borrowers. This is because the cash generated from lifetime mortgages may be used to pay off previous debts. However, interest only lifetime mortgages permit the borrower to pay monthly instalments of interest and varying interest rates may result in financial difficulties, hence putting the property at risk. An increase in capital will also affect the borrower’s ability to apply for state benefits.

Another scheme associated with lifetime mortgages are interest rollover lifetime mortgages. The borrower does not need to pay monthly instalments of interest. Instead, interest is calculated every month and added to the debt of the mortgage, which is all paid when the arrangement is terminated. The money generated from interest rollover lifetime mortgages can be used to the borrower’s wishes, or used to purchase an annuity. This provides the borrower with a consistent income until death.

Interest rollover lifetime mortgages have many variations. The borrower can use the plan to generate a cash lump sum, allowing the individual to spend the money on what they desire. Borrowers may be entitled to withdraw less significant lumps of money, also known as drawdowns.

A borrower could also arrange a home income plan. Here, the borrower receives a lump sum of money; he/she is likely to purchase an annuity. By receiving the annuity, individuals are guaranteed a lifetime income, which is used to pay off monthly instalments of the mortgage and interest.

Home income plans can be of benefit to the borrower, as they will have a significantly reduced debt to pay off at the end of the contract. This will leave more equity in the property, allowing the borrowers beneficiaries to reap from the remains of the estate value. However, this plan should only be arranged when the income from the annuity is more than the mortgage payments each month. Home income lifetime mortgages may put borrowers in a difficult financial situation.

Anyone considering lifetime mortgages must understand the risks and benefits of each of the lifetime mortgage schemes. Our advisers provide specialist help to those who are seeking lifetime mortgages.

Lifetime mortgages may be of significant benefit and enhance your financial future. Contact our advisers today to receive specialist advice on lifetime mortgages.

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This is a lifetime mortgage. To understand the features and risks, ask for a personalised illustration.

CHECK THAT THIS MORTGAGE WILL MEET YOUR NEEDS IF YOU WANT TO MOVE OR SELL YOUR HOME OR YOU WANT YOUR FAMILY TO INHERIT IT. IF YOU ARE IN ANY DOUBT, SEEK INDEPENDENT ADVICE.