Lifetime mortgages – or equity release mortgages, as they’re also known – are on the rise. According to the Equity Release Council*, the body that represents the equity release sector, 14,216 new and returning customers made use of equity release products between January and March 2024 – up 4% from the last quarter of 2023.
If you’re reading this and wondering ‘what is a lifetime mortgage?’, then take a look at one of our many articles on equity release here. However, as a one-line summary, lifetime mortgages enable you to access the equity in your property that you’ve built over time whilst continuing to live in that property.
If, however, you’re further down the road, familiar with this type of product and are ready to apply for a lifetime mortgage, then there are a few things to think about. So, here are our top four things to consider when applying for a lifetime mortgage from our team of Guildford equity release mortgage brokers.
1. Look at the bigger picture
There’s no doubt about it, being able to release equity from your property and still live in that property is very convenient. It’s almost a ‘have your cake and eat it’ option. However, there are other options – all of which should be considered before you commit. To make sure you have a full understanding of the pros and cons of lifetime mortgages, we strongly urge you to use a good mortgage broker, who will be able to guide you through every lifetime mortgage product available and help you to explore all the alternative options available to you, too.
2. Don’t be tempted to overborrow
Pulling out as much equity from your property might be tempting in the short-term, but in the long-term, it’s likely to attract high interest charges. Our team of Guildford mortgage brokers always advises its lifetime mortgage clients to only borrow what they need. Of course, your requirements may change later on down the line, but it’s more cost effective to borrow in increments (if you need to) rather than taking one big lump sum at the beginning.
3. Take the long view
When it comes to getting a mortgage, the rate is generally the deciding factor. However, with lifetime mortgages, which span a much longer timeframe, we’d recommend looking at a few more factors, too. Getting the cheapest lifetime mortgage rate is still key, however, other factors are very important, too. For example, can you repay it early if you have a windfall? If so, what are the charges? Can the mortgage be moved across to another property if required? And, importantly, is it regulated by the Financial Conduct Authority? It’s all very well having the cheapest UK lifetime mortgage rate, but if there’s no flexibility in the product or it isn’t bound by regulation, it may bite you later on down the line.
4. Use lifetime mortgage specialists
A lifetime mortgage is a relatively complex product. As a result, you should aim to use lifetime mortgage specialists if you’ve decided to go down this route. Our team of Surrey mortgage brokers are fully trained in equity release, for example. Likewise, we recommend using an experienced equity release solicitor that’s also a member of the Equity Release Council, which you can access here. Lifetime mortgages are a long-term agreement, go getting it right at the beginning is crucial.
Need more advice on lifetime mortgages? Our team of equity release brokers in Guildford can walk you through the process, present ALL the options available and help you come to a decision that’s right for you.
Considering a lifetime mortgage? Need equity release advice? Contact the Complete Mortgages team on 01483 238280 or e-mail info@complete-mortgages.co.uk.
Recent Comments