If you’re asking this question, or wondering what’s the difference between lifetime mortgages and equity release mortgages, then it’s highly likely that you are 55+ and exploring ways in which to fund your retirement.
And when it comes to retirement, everybody is different. Some people have pensions. Others have properties. Then there are those who maybe have the property that they’ve lived in for many years and no pension. For the latter group, extracting equity accrued in the property over years of continued growth is a viable way in which to access a substantial amount of money.
But what does that look like and how does equity release work? More to the point, what is a lifetime mortgage?
How lifetime mortgages work
As a Surrey equity release adviser (and Guildford mortgage broker), we’re seeing more and more people applying for a lifetime mortgage, which is a type of equity release mortgage. Why? Because it enables homeowners to release equity at the same time as staying in their property until they need to move into full time care – or until they die.
Essentially, lifetime mortgages do exactly what they say on the tin – they last a lifetime. The lender releases the funds locked in a homeowner’s property and interest on that money builds up over time. Unlike a standard mortgage, which requires monthly payments, lifetime mortgages don’t require monthly payments (although you can make interest payments if you wish to do so). Instead, the balance is paid when the property is sold.
How do I get a lifetime mortgage?
The world of equity release is slightly more complicated than standard mortgages as there is more to consider, such as whether or not a sudden cash injection would impact any means-tested benefits you receive.
As there is also a growing number of equity release mortgage products entering the market, navigating this landscape before choosing a lifetime mortgage that suits your needs can be time intensive. And this is where the benefits of using a mortgage broker come into play.
Mortgage brokers, especially equity release mortgage advisers such as Complete Mortgages, not only understand UK equity release mortgages, but they can also advise on the wider implications around equity release, too. As a result, you’ll be able to receive balanced advice and discuss the pros and cons before making any firm commitment.
Who can get a lifetime mortgage?
If you’re 55 years old and above, own a property worth at least £70,000 and are looking to release £10,000 or more, then you may be eligible for a lifetime mortgage. Remember, there are other types of equity release mortgage, too, such as home reversion plans. However, we’ll cover those off in a future article.
If you qualify for equity release, are looking for quick access to money and wish to remain in your current property, then equity release might suit you. Contact our team of Guildford equity release specialists on 01483 238280 or e-mail us at firstname.lastname@example.org to find out more.