Many of us are living longer, healthier lives, but this can mean that by the time we reach retirement, we are ‘asset rich’ but ‘income poor’.
This can put pressure on our immediate finances, especially if there are things we would like to spend our money on.
Fortunately, there are a number of options to help make the most of your finances. Equity Release is one of them.
This could give you funds to repay such things as your mortgage or outstanding loans, to buy that new car, to travel to far-flung places or for home improvements. It could also be used to fund your grandchildren's education, to pay for the cost of extending a lease or to purchase a share of a freehold for example.
There are three main types of Equity Release. If you are considering any of these solutions please check that the chosen arrangement will meet your needs if you want to move or sell your home, or if you want your family to inherit it.
It is important to remember of course that there are costs associated with Equity Release schemes, but I will make sure you are aware of all the pros and cons. The first meeting between us will enable me to gather the information I need, and is at my expense. Once you instruct me to proceed I charge £950 to prepare a report describing your situation, the options available and my suggestions. The charge also includes matters arising and further queries. My implementation fees are often paid by the lender.
Lifetime Mortgages
A Lifetime Mortgage is the most common type of Equity Release. It is a long-term loan secured against your home similar to any other mortgage. It enables you to continue living in your property and retain ownership.
A Lifetime Mortgage is repaid when you die or go into long-term care.
The interest is usually added to the loan and paid at the end of the term. Alternatively, you can pay (some or all of) the interest monthly so that the amount owed does not increase.
Many lenders will allow penalty free repayments of up to 10% each year.
Lifetime mortgages are available to anyone over 55, but the amount released will depend on your age, health, and the value of the property. Not all properties are eligible.
To understand the features and risks of a Lifetime Mortgage, please contact Keith Galgut on 0777 5507 331.
Home Reversion
This is where you sell all or part of your home to a finance group in exchange for a lump sum based on its current value.
You no longer own your home, but can continue living there for the rest of your life.
There is no interest to pay as the finance group owns all or part of the property. Depending on the percentage of the property sold, you could benefit from future gains in the value. The lender will usually pay a discounted price for the property in lieu of rent or interest.
To understand the features and risks of a Home Reversion, please contact Keith Galgut on 0777 5507 331.
Retirement Mortgages – also known as Pensioner Mortgages
Being past the state retirement age doesn’t mean you can’t get a mortgage. Some lenders have increased their age limits, understanding that many pensioners are healthy, active and might need a mortgage in retirement.
If you’re over 55, and can afford to make monthly repayments, a Retirement Mortgage might be right for you.
To understand the features and risks of a Retirement Mortgage, please contact Keith Galgut on 0777 5507 331.
PLEASE NOTE: Your mortgage is secured on your home. Your home may be repossessed if you do not keep up repayments on your mortgage.
The different types of Equity Release products explained here are for information only. to determine the most suitable Equity Release Solution, I would need to meet with you to gather relevant information about you, including your needs and objectives, before being able to make the most suitable and appropriate solution.
The content of this page is for general information only and should not be considered advice. Professional advice relating to your individual circumstances should always be sought prior to making any decisions or taking any action. Equity Release is not suitable for everyone. Your Mortgage is secured on your home. Your home may be repossessed if you do not keep repayments on your mortgage. You should seek advice to ensure that you fully understand all implications for you and your home and for anyone who might otherwise inherit the property. All details were correct at the time of writing.
For more information call Keith Galgut on 07775 507 331.
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