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Some crucial benefits of Halifax equity release

Sunday, May 29th, 2011

The Halifax equity release scheme is an interest only lifetime mortgage plan. It is specially developed for retired individuals to boost their retirement standard of living. With this type of scheme, the outstanding balance remains unchanged throughout the plan tenure. The applicant only needs to pay interest regularly to the lender.

Traditional roll-up equity release schemes do not require the applicant to make interest payments. However, the interest keeps rolling up over the tenure period. This means that the outstanding loan keeps rising all the time. With the present interest rates, the loan amount will keep doubling after approximately every 10-11 years dependent upon the equity release interest rate. This means, if you have a loan of £10,000, after 10-11 years, you will owe £20,000.

Retired individuals, who can afford to make monthly repayments from their state benefits or pension, should opt for a Halifax equity release plan. While considering opting for equity release, it is important to get the right advice from the professionals. As professionals have the required knowledge and expertise, they can help you get the right scheme that will cater to your needs.

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Why do people opt for a Halifax equity release plan?

The Halifax equity release scheme, being an interest only mortgage plan for pensioners, does not require any form of repayment. This is also one of the most exclusive features of the Halifax equity release plan. With this kind of scheme, your mortgage is automatically allocated for a term of 40 years. However, should you live longer than this period then this lifetime mortgage plan will continue until death or the last person has moved into long term care.

It is due to these reasons that the Halifax equity release scheme has become extremely popular amongst retired individuals.

Contact the mortgage desk on 0800 783 9652 or email admin@equityreleasesupermarket.co.uk for the latest rates & information.

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Stonehaven’s New Equity Release – Interest Select to Inheritance Protect

Tuesday, March 8th, 2011

On Thursday 3rd March 2011, the equity release market saw another welcome lender return with Stonehaven relaunching their Lump Sum & Interest Select plans.

Having been absent for over a year whilst new funders were sourced, Stonehaven have now streamlined & simplified their product range.

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One product in particular will answer a common question –

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“Can I have an interest only equity release plan where I can repay the interest?”

Well the answer is now categorically – ‘YES’

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Before discussing the Stonehaven Interest Select option in greater detail, let’s have a look at the two products launched.

Stonehaven now have two propositions available to customers: -

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1. Lump Sum Only Option

2. Interest Only Equity Release

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The lump sum option does as it says on the tin; namely two lump sum options which offer different loan to values. Stonehaven are not launching at the maximum release end of the market, but aiming competitively with lower interest rates.

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Lump Sum Lite has the lowest interest rate at market leading 6.13%.

Plans start at 55 & this product will release 11% of the property value at this age.

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The Lump Sum plan has a higher interest rate of 6.24%, with a higher release of 14% at age 55.

Both plans have no drawdown facility, but a simplified single lump sum option from the outset.

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Next we come to the Interest Select products.

These innovative plans allow you to choose how much of the interest charged you would like to repay each month, and also how long you wish to pay this for. You could pay off the whole interest, or if you have a specific budget just pay off part of the interest with the remainder rolling up onto the original capital borrowed.

In effect it can be classed as an interest only lifetime mortgage for pensioners.
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Traditional equity release may not be suitable for everyone, especially due to roll-up of interest & the reduction this will make to potential beneficiaries.
Therefore, particularly suitable for people with good disposable incomes & used to servicing & managing debt throughout their working lives, these people can now control how much inheritance they leave behind by these new equity release schemes.

Primarily, it can be regarded as a half way house between a conventional mortgages and roll-up equity release. The scheme is an interest only eqity release & has all SHIP safeguards and protection offered by the FSA.

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However, a major feature of the Interest Select plan is the ability to be converted over to a full roll up scheme at a later date. This could be when one party to the mortgage dies or financial circumstances dictate that no more monthly payments wish to be made.

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Simplification on the new Interest Select means that when conversion arises, the new rate on the equity release plan will only be 0.2% higher than on the previous Interest Select. However, better still, should the roll-over date be previously set, then roll-over will be at the SAME interest rate as the original interest only element.

With interest rates starting at 6.13% which are currently the lowest in the market, a particularly attractive proposition can be found here for those interest rate tarts!

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TIP – Should one be able to afford the minimum monthly contribution of £25pm for the minimum roll-over period of 12 months, then one can easily achieve a roll-up equity release plan with a 6.13% monthly interest rate thereafter!

Surely, a tip not to be passed by?

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There have been four Interest Select plans launched which surely indicates which way Stonehaven feels the market potential lies.

These range from the Interest Select Lite at just 6.13% & releasing 11% at age 55, upto Interest Select Max with an interest rate of 7.57%, but releasing a higher 19% at age 55.

An example of borrowing £40,000 on the Stonehaven Interest Select Lite at 6.13% would result in monthly payments of £205pm.

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Qualification Criteria for Both Schemes

All Stonehaven equity release products are available to people aged 55 and over, living in a main residence in England and Wales & must have a minimum property valuation of £70,000. The minimum release has been reduced to £10,000.

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Additional Features

No Negative Equity guarantee
There is the guarantee that when the property is sold on death or long term care, the proceeds payable to Stonehaven can never be greater than the property value itself. This guarantees there can be no excess debt passed to the beneficiaries.

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Protected Equity
A valuable inheritance protection feature applicable to the lump sum plans. There is the facility to choose to protect a percentage of the final sale value of the property. Point to note is that the no negative equity guarantee and the amount that Stonehaven will lend are based on the value of the unprotected portion of the property.

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Thus, another chapter unfolds in the equity release storyline; providing greater diversity in the whole of market lifetime mortgage product range. A welcome read & a promising sign of further things to come for the industry.

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If you have any questions, or wish to obtain advice on the Stonehaven range of products please contact the Equity Release Supermarket team on 0800 678 5159 or email mark@equityreleasesupermarket.co.uk

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Home reversion equity release schemes – what are they?

Wednesday, December 22nd, 2010

Home reversion equity release schemes allow you to sell a part of or your entire property to a lender. In return, the home reversion company will provide you with a monthly or lump sum cash amount or a combination of both.

Although the interest is not paid on the loan you take, the home reversion company will take a percentage of the value of your property when it is eventually sold. This percentage will often depend on numerous factors including – your age, the cost of your property and its condition.

The older you are, the more money you will be able to receive. Additionally, should you have a history of poor health then certain home reversion providers can potentially offer you a greater lump sum, or alternatively a lower percentage sale of your property.

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How do home reversion equity release schemes work?

With home reversion equity release schemes, you sell part of or the entire property to the lender and become a tenant with a lifetime tenacy guarantee. You will still be responsible for your property, its maintenance and bills. Although you become a tenant, you get the rights to reside in your property with your partner under a lifetime lease. Unlike normal residential tenants, there is no rent to pay for the rest of your life.

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The difference between lifetime mortgages and home reversion

Under a lifetime mortgage scheme you retain the complete ownership of your property. On the other hand, with a home reversion scheme you can sell anything up to 100% of your property to the home reversion company.

A major benefit of home reversion schemes is that you can guarantee the percentage of the final sale value of the property at the end of the day. A lifetime mortgage has no guarantee as there is no knowledge of how long the plan will roll-up for, which at the end of the day could result in NO inheritance for the children.

There are also some interest only lifetime mortgage schemes such as the Halifax Retirement Home Plan that enable you to repay the interest but not the capital to the building society or bank. This greatly helps you to calculate how much inheritance will be left as long as the monthly payments are an affordable option.

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If you wish to discuss whether a lifetime mortgage or home reversion scheme is right for you contact the Equity Release Supermarket team on 0800 678 5159.

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Equity release – three popular schemes offered by lenders today

Wednesday, December 15th, 2010

Do you want to unlock money against your property’s value? If your answer is yes, once all your options have been established, then equity release schemes can be perfect for you. These schemes are specially meant for retired people who are over 55 and own property.

To fulfill different financial needs, various equity release schemes have been introduced into the marketplace. From single lump sum schemes back in the early equity release days, through to the more flexible drawdown equity release schemes on offer today.

This includes two major types – home reversion plans and lifetime mortgages.

The lifetime mortgage equity release is further categorised into various schemes such as:

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Lifetime roll-up mortgages – Under this scheme, there is no need to pay the interest every month. The interest accruing will be rolled up annually on to the main debt. This means that you do not have to pay anything and can still continue living in your property. The property will remain 100% in your name with the equity release providers putting a first legal charge at the land registry. This is one of the main reasons why many people opt for this scheme.

Drawdown lifetime mortgages – This scheme is now preferred by many homeowners because it allows them to take payments whenever they want. The best thing about this scheme is that after taking the inital lump sum a reserve facility is created which is a cash fund for future use. This reserve facility allows withdrawals to be made whenever additional tax free cash is required. This could be for an emergency such as boiler breakdown; a purchase such as new car or annual holidays.

Interest only lifetime mortgages – Unlike roll-up lifetime mortgage schemes, this mortgage option allows you to pay monthly interest and avoid building debt. In effect, you are repaying the monthly interest which is accruing, thus maintaining the principle balance at the same level for the duration of the plan term. Schemes such as the Halifax Retirement Home Plan, offer these features whereby you are provided with a term of 40 years & interest only repayments only with NO repayment vehicle being required. Once you have selected this scheme then only the principal amount needs to be repaid to the lender which as with equity release schemes is repaid upon sale of the property.

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With so many different options available to release equity, why not contact the Equity Release Supermarket by calling freephone 0800 783 9652 today. We look forward to hearing from you.

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Mark Gregory CeMap CeRER

Director

mark@equityreleasesupermarket.co.uk

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Equity release schemes – Two popular types of lifetime mortgages

Monday, November 29th, 2010

Equity release is a scheme which is designed to assist retired homeowners release some money against the value of their homes. If you find it difficult to live with small pension, possibly even benefits and little savings then equity release is an ideal option for you. Once you have opted for equity release then the eventual repayment will be done after your death or when you move to long term care. This is the time at which beneficiaries will be in receipt of their inheritance.

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Today, two different types of equity release schemes have been introduced to the market. These include home reversion plans and roll-up lifetime mortgages.

Many homeowners opt for lifetime mortgages because they offer great benefits.

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Two types of lifetime mortgages: -

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Roll-up lifetime mortgages – These equity release schemes are specially designed for those who want to release equity without paying monthly repayments. The amount that can be released is based on the age of the youngest applicant & the property value.

The younger the age, the lower the equity release sum that can be released. The reason for this is down to life expectancy, as lenders do not want to release too much at a younger age due to the roll-up of interest. With average life expectancy of a 60 year old now reaching beyond 80, lenders must err on the side of caution. The reason being that they do not want the equity release balance to reach beyond the property value in the future. This would cost them dearly as the no negative equity guarantee would then need to be invoked.

The mechanics of the roll-up lifetime mortgage means that the interest will be compounded monthly or annually & re paid eventually along with the original capital on the eventual sale of the property. Another important feature of these equity release schemes are that they allow you to maintain 100% ownership of the property.

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Interest only mortgages – This is one of the unique schemes which allow homeowners to release equity and repay monthly interest only. This means that the monthly repayment must be affordable on their retirement incomes. Such equity release schemes such as the Halifax Retirement Home Plan are few & far between as there are not many mortgage or equity release companies that offer finance to the over 65 age group.

Nevertheless, Equity Release Supermarket have unique access to such schemes & their team of friendly equity release advisers can identify which is the most suitable scheme dependent on your personal circumstances.

Interest only mortgages such as those offered by Halifax, will maintain the same balance from start to finish & therefore can guarantee how much of your estate will be required to settle with the lender at the end of the term. The balance will only be repaid after your death by selling the property. This will be carried out by the nominated executors who have been appointed in your Wills.

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If you have a question on whether a roll-up or interest only mortgagee is right for you contact the Equity Release team free on 0800 678 5159 or email mark@equityreleasesupermarket.co.uk.

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Equity release schemes – five important benefits

Tuesday, November 9th, 2010

The current economic situation has forced everyone to look for different ways to raise money.

Equity release schemes are one option available to enjoy the fruits of retirement in a way many would never have envisaged.

Some people are still unaware of equity release schemes and their numerous benefits; here we aim to address those issues.

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Maintain standard of living

Immediately upon retirement, there is an evident drop in income. Unfortunately expenses do not.

You may think that saved money during your working life will be adequate for you to live comfortably. Rising inflation & lack of confidence in pension plans might make this difficult.

There are other options to consider & one of these maybe to downsizing to a smaller home. Other options available prior to considering equity release would be using any savings, asking relatives for financial assistance, claim any benefits due or if you have a good disposable income there is still the option of an interest only mortgage. The Halifax Retirement Home Plan can assist here.

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If you look into equity release schemes, you will notice that you do not have to sell your property. Therefore, you can remain at the property for the rest of your life.

Applying for equity release, enables you to obtain some of the cash value of your property and with a roll-up lifetime mortgage you still remain the owner. This way, you can maintain your standard of living and can avoid the hassle of moving into another house.

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Fulfil your needs

Additional cash can help retired individuals to fulfil basic needs as well as allowing them to pursue leisure activities. You may want to clear some debts, go on a long holiday, buy a new house or simply develop new hobbies. Equity release schemes can help you with these things.

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The age factor

Age is an important factor when buying an equity release scheme. Your age is directly related to the amount of cash you can get. The older you are, the more you can get. Lifetime mortgage schemes start at age 55 with a maximum release of 20% & run beyond age 90 releasing over 50%.

Home reversion schemes start at age 65 & again go past age 90 with the maximum release being the sale of 100% of your property to the home reversion provider.

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No limitations on spending

A good thing about equity release schemes is that you can spend the money the way you want to and there are no restrictions. We would only advocate initially taking an amount which you are likely to require in the first 12 months. The reason for this is that drawdown equity release schemes allow you to take the equity release cash in stages rather than all at once. This ensures that you pay less interest in the long run as you only pay interest on the actual amount you have withdrawn.

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Tax-free cash

The cash you receive from the scheme is free of income tax. However, if any funds are placed on deposit then you could pay tax on any interest gained.

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To find out whether equity release is suitable for you why not have a free initial consultation with one of our qualified equity release advisers. Call now on freephone 0800 678 5159.

Alternatively, email admin@equityreleasesupermarket.co.uk.

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Website – http:///www.equityreleasesupermarket.co.uk

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The Halifax Retirement Home Plan – The Quest To Find Mortgages For Pensioners?

Tuesday, October 26th, 2010

Planning for your retirement in essence should start in your earlier years; however as we know life unfortunately doesn’t always go to plan!

Here we discuss the merits of the niche interest only mortgage product; the Halifax Retirement Home Plan which is becoming an increasingly popular way of providing mortgages for pensioners.

Since writing my original article on the Halifax Equity Release plan (click here to view), interest has certainly been escalating. The main reason being that people in retirement are unaware of their mortgage options once they finish work. But life must go on.

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What is the history of the scheme?

Established in 1984, the Halifax Retirement Home Plan was initially available through the Halifax branch network and was developed to provide low cost mortgage finance for the retired & elderly.

However, under the Financial Services Authority review of the lifetime mortgage market in 2006, Halifax withdrew the branch license to offer lifetime mortgage advice.

Therefore, the responsibility for providing advice on the Halifax Retirement Home Plan was left completely with lifetime mortgage qualified advisers including independent specialists Equity Release Supermarket.

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So what is the Halifax Retirement Home Plan?

In simple terms the scheme is an interest only mortgage for people who are retired & facilitates the release of equity tied up in the property. The release of funds can be for almost any purpose including:-

  • debt consolidation including paying off credit cards/loans or mortgages
  • holidays including cruises or just day trips
  • replacement car or caravan
  • home improvements
  • gifts to the children providing a deposit for house purchase
  • supporting your lifestyle through retirement.

Qualification for the Halifax equity release scheme is based on income. Halifax will only accept non-earned income & this must be in the form of: -

  • Occupational pensions
  • Private pensions such as personal pensions or retirement annuities
  • State pensions
  • State benefits including pension credits & disability benefits

The stated minimum age for the Halifax Retirement Home Plan is 65. However, as long as there is no earned income & justification for the size of the mortgage can be based solely on the above income, then ages lower than 65 can be achieved.

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How much can be released?

The minimum release on the Halifax Retirement Home Plan is only £15,000. However, to establish the maximum release possible would require the use of an affordability calculator.

Halifax does not base the size of release on a multiple of income, but whether the interest only mortgage can be afforded through retirement.

The data Halifax requires for this calculation includes income, credit status, number of applicants & credit commitments outstanding after the new mortgage commences.

This procedure can be carried out by qualified advisers such as Equity Release Supermarket & is an accurate assessment of the potential borrowings on this scheme.

The overall maximum release available can never be more than 75% of the valuation of the property. Therefore, should the affordability calculator show a figure greater than this, it will still be capped at 75% of the property value.

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Does Halifax require a repayment vehicle?

The answer to this is NO.

As the Halifax Retirement Home Plan is an interest only mortgage for pensioners, no form of repayment is required.

In contrast, the mainstream mortgage market is actually tightening its grip on new interest only mortgages, whereas this Halifax equity release scheme will still accept repayment by virtue of the eventual sale of the property. This would be on death of the surviving partner, moving into long term care or earlier property sale.

The term allocated to the Halifax home retirement plan is 40 years which should provide ample time for it to run for the rest of one’s life! This removes any concern about having to find the funds to pay off the Halifax scheme during your lifetime.

Most mortgage providers will only accept a mortgage term upto age 70-75 or in rare instances age 85. However, this only buys time as eventual repayment would be required. However, this scenario may still be suitable should one be downsizing at a predetermined date in the future.

The Halifax Retirement Home Plan therefore removes any element of capital repayment risk.

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So what interest rates & products are available?

Dependent upon whether you are a new or existing Halifax customer will determine the interest rates & products applicable.

Currently, the better deals are offered to new customers as they have access to the whole mainstream Halifax product range. This is a great advantage, as there is full access to current low rate tracker & fixed rate products. Click here for the latest interest only mortgage rates…

These include deals such as the current 2 year tracker rate at just 2.59%. Based on borrowing £50,000 this currently would only cost £107.92pm (3.6% APR).

Additionally, if remortgaging from another lender then there is the benefit of a free valuation & free standard legal fees, which reduces the set up costs significantly. I have experienced clients who have just £800 outstanding on a mortgage or even documents kept in deed store that qualified for this free remortgage package!

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What if I already have a Halifax mortgage?

The good news is you can still apply for the Halifax Retirement Home Plan. However, the situation here requires completely different advice & procedure. Should you wish to merely transfer onto the Retirement Home Plan then you can port over your existing rate which can be good news if on a standard variable rate. However, if you wish for additional borrowing then the process becomes a little more complicated.

The product range for existing Halifax customers is rather sparse & with the best deals starting currently at 4.99% fixed, hence there is a distinct advantage for new customers.

Such applications will be paper based & therefore processed manually which involves more human input. Experience has shown this results in a different underwriting approach to the process undertaken on new applications.

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Can I pay off the Halifax Retirement mortgage early?

The simple answer to this is YES.

Unlike equity release plans where penalties can potentially apply for the rest of your life, the Halifax interest only mortgage will only have early repayment charges for the initial product term. Therefore, should you have opted for the 2.59% 2 year tracker product discussed previously, the penalties would only apply for the first 2 years. After, this 2 year period the mortgage would then revert to the Halifax standard variable rate, currently 3.5%.

However, before the initial rate expires you will have the option to take out a new product from the Halifax mortgage range available at that time.

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So what is the advantage of the Halifax Retirement Home Plan over an equity release scheme?

The obvious answer to this is the fact that the Halifax mortgage is interest only & therefore requires a monthly payment of interest. The balance will always remain the same throughout the term of the plan. E.g. borrowing £50,000 today, will result in £50,000 requiring repayment once the house is sold.

In contrast, equity release schemes do not require any monthly repayment & therefore the balance will increase over time. Roughly speaking the balance of equity release schemes will double every 10/11 years.

From a beneficiary’s point of view, the Halifax interest only mortgage will guarantee an inheritance, as the final balance of the mortgage will always be known. This would be favourable for people who want to ensure the children definitely receive an entitlement to their parent’s inheritance.

With all this information & options available it is more important than ever to receive specialist advice to obtain the best deal for your personal circumstances.

Equity Release Supermarket can provide independent advice on both equity release schemes & interest only mortgages for pensioners.

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For further information or to request a quotation, please ring Mark on 0800 783 9652 or email mark@equityreleasesupermarket.co.uk.

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Two different types of lifetime mortgages

Wednesday, October 13th, 2010

If you want to improve your lifestyle or repay outstanding debts and do not have enough cash then consider the potential of an equity release scheme. Homeowners who are over 55 and have little or no mortgage can release money against the value of their home. Due to different needs, different equity release schemes have been introduced.

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Lifetime mortgages and home reversion plans are two popular types of equity release schemes.

Lifetime mortgages are further divided into two subtypes:

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Roll-up lifetime mortgages – This equity release scheme is preferred by many people because they do not have to pay any interest. Instead the interest is added to the original balance & compounded year-on-year for the rest of one’s life.

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Interest-only lifetime mortgages – If you do not want your debt to build up then an interest-only lifetime mortgage can be the perfect option for you. Unlike other equity release schemes, this scheme allows you to pay off the monthly interest to the lender. By opting for the interest-only option, you can preserve more money for the future.The balance of the interest only mortgage scheme will therefore remain level for the rest of the term of the mortgage. Such schemes available include the exclusive deal Equity Release Supermarket have available with the Halifax.

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The Halifax Retirement Home Plan is available to those having already retired with a good disposable income with which they can service the monthly payments. The Halifax Retirement Home Plan is not available via the Halifax branch network as only lifetime mortgage advisers with the appropriate licence can advise on this product.

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Whether you choose a roll-up or an interest-only mortgage you can release the equity tied up in your property to provide the tax free lump sum you require.

You can use the tax-free money to spend as you wish including buying a new car, a second home or to go on a luxury cruise; the list is endless.

If you have decided to opt for equity release schemes then it is recommended that you receive advice from an equity release adviser who will guide you to the best equity release plan & guide you through the equity release process.

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To find a local Equity Release Supermarket financial adviser near to you click here.

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Why choose equity release schemes over other loans?

Sunday, October 10th, 2010

Equity release schemes are designed in a way that they allow older people to release equity against their property. If you are worried about income or cash flow during your retirement then equity release is an ideal option for you.

The options for retired people to raise finance can vary from credit cards, personal loans, mortgages & equity release. However, before any commitment is entered into all alternative avenues should be established: -

  • Have you any savings that can be utilised?
  • Can your children help you financially?
  • Are there any benefits that you are entitled to that you are not claiming at present e.g. pension credit or council tax benefit?
  • Have you considered taking a lodger should room permit?
  • Can the local authority assist with any home improvements that you are looking to fulfill e.g. cavity wall insulation, loft insulation or central heating grant?

Once these avenues have been eliminated for one reason or another then if alternative finance needs sourcing, regulated financial advice should always be sought.

The next steps as to which form of finance is suitable would depend on age, employment & the actual amount required.

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Should the funds required be less than £10,000 then the only option of finance would be some form of personal loan. However, as the loan is usually only 5-10 years maximum the monthly payments can be expensive in relation to the retirement income & therefore be possibly ruled out.

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Another possible resource, could be a conventional or interest only mortgage such as the Halifax Retirement Home Plan. This mortgage is only available for those who have already retired & whose retirement income is sufficient to support a mortgage with monthly repayments.

However, if one’s income in insufficient to support this then the last resort could be an equity release plan. However, before resorting to this route you must always seek the advice of a specialist such as Equity Release Supermarket. They are able to ascertain your requirements & due to the independence can research the whole of the market to find the right solution for your individual needs.

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Because everyone’s financial needs are different then two different types of equity release schemes have been introduced.

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• Lifetime mortgages
• Home reversion plans

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Both these schemes offer you a lump sum amount of cash against your home. One of the main features of these schemes is that you can live in your home for the rest of your life. To qualify for an equity release scheme, you have to be over 55 years of age and own your own property. The value of your property must be above £70,000 & be of mainly standard construction & possibly mortgage free.

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Additional benefits of equity release schemes

Once you have applied for an equity release scheme then you will get tax-free cash which can be used for your retirement. Most people use this cash to improve their lifestyle, get a new car or repay their outstanding debts, however the funds can actually be used for whatever you wish to spend the funds on.

If you have decided to go for an equity release scheme then make sure that you hire an independent financial consultant. He will help you to deal with the complicated procedure of the scheme & ensure you receive the best advice in accordance with the SHIP standards & rules of the FSA.

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Should any of this article be of relevance to your situation or you wish to discuss whether equity release can be of benefit to you please contact the Equity Release Supermarket team on 0800 783 9652.

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Lifetime equity release schemes – Here is some information you ought to know

Wednesday, October 6th, 2010

If your pension falls short of your budgetary requirements, then an equity release scheme could certainly be a good solution. Equity release is specially designed for homeowners who are above 55 years of age and want to unlock money against the value of their homes. And, one of the best things about the money which you will get under equity release is that it is tax-free.

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What is a lifetime mortgage equity release scheme?

Most homeowners opt for this scheme & it accounts for almost 90% of all equity release schemes undertaken. These equity release schemes allow them to borrow money against the value of their homes, retaining 100% ownership. The best thing about a lifetime mortgage scheme is that it does not demand monthly payments.

As there are no monthly payments, the interest is directly added to the original amount borrowed & it can either be added monthly or annually. Under lifetime equity release, the repayment is made after your death or on moving into long term care, by selling the property.

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Additional features offered by lifetime mortgages

As you will receive the money on the basis of fixed interest, you are therefore completely protected from interest rate volatility. This means that, providing you don’t borrow additional funds, then you will know in advance the future balance of the equity release plan. Some newer equity release schemes will let you build an inheritance protection feature which will leave some value of your home or property for your beneficiaries.

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Lifetime mortgages – Three different types

This equity release scheme is further categorised into three different types. The first one is a roll-up scheme which allows you to avoid any repayment, with the interest compounding over the years. Under a fixed repayment scheme, you only have to pay a pre-determined amount of money to the lender, thus protecting the inheritance to your beneficiaries. Lastly, interest-only lifetime mortgages allows you to pay the interest every month.Therefore, the balance will remain the same throughout the term of the mortgage. Such schemes as the Halifax Retirement Home Plan will meet this criteria.

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Equity Release Supermarket are independent equity release specialists who can advise you on which scheme is best for your individual circumstances. Call the team now on 0800 783 9652.

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