We’ve covered the benefits of equity release mortgages extensively, and we’ve outlined the different types of equity release mortgage available (you can read our last two equity release articles here and here). However, the constant evolution of the equity release product means that releasing equity for those aged 55 and over is now more flexible than ever.
Not too long ago, equity release lenders would roll up any interest and repayments until the point when the homeowner moved into care or passed away, at which point the loan would need to be paid back.
Now, the equity release borrower can make repayments, either as monthly interest only payments or on an ad-hoc basis (up to 10% of the balance each year). This allows those who have taken out an equity release mortgage the freedom to make payments on their terms.
The flexible nature of equity release also extends to how the money is drawn down. Prior to the recent meteoric rise of equity release, borrowers had to take a lump sum. This not only meant that interest began to accrue at the point that the entire capital was transferred, but it also placed a considerable amount of responsibility on those who suddenly had a large pot of money to manage. This is no longer the case, as borrowers can arrange regular monthly payments over a defined period of time.
The final point on flexibility, then, is that equity release mortgages are portable. So, if you take out an equity release deal on a large property you own today, but decide in 2023 you want to downsize to a smaller property, then you can, in some cases, pay off the loan – or part of the loan – without incurring any charges.
In our view, these are three good reasons to consider equity release mortgages if you’re 55 and over. And this takes me on to my next point about a story covered in The Money Pages last month, which reported on how, according to a survey by SunLife, a third of those aged 50 and over fear losing their home as a result of taking out an equity release mortgage.
Given the three points around flexibility we’ve outlined here, there’s a risk that those who would perhaps benefit from applying for an equity release mortgage are missing out on the opportunity to do so – either through a lack of understanding of how equity release works, or as a result of professional organisations not communicating its merits clearly and effectively enough.
The answer? Pick up the phone and contact the team at Complete Mortgages, which now includes several equity release mortgage specialists. As an award-winning Guildford mortgage broker, we handle multiple equity release mortgage applications each day and can quickly walk you through the pros and cons of equity release, and answer any questions you might have.
Get in touch with the equity release team at Complete Mortgages by calling 01483 238280 or by emailing firstname.lastname@example.org.
Equity release not what you’re looking for? Not a problem, as we’re also a first-time buyer mortgage specialist, buy to let mortgage specialist and commercial mortgage specialist, too.