How to Find the Best Lifetime Mortgage Deals
Lifetime mortgages are a type of equity release that allow clients of a certain age to release tax-free income or a lump sum from borrowing against the value of your house, whilst still being able to live in the property and retain ownership.
Lifetime mortgages are the most commonly used equity release and is where a mortgage is taken out on the property to give the receiver capital. You can also choose to make repayments or to allow the interest to be added to the capital and this can be rolled up and repaid when the home owner moves out or dies. It is important to note that unlike home reversion schemes the borrower remains the legal owner of the property. This type of equity release is typically available for those who are over 55 and up to 60% of the property can be borrowed. It is also seen to be attractive to so many as no proof of income is required and your credit status is not considered.
Now we know a little about lifetime mortgages how do you find the best deal? Lifetime mortgage are sold by most major insurance companies, the biggest provider being Aviva along with One Family, Hodge Life and Legal and General. You have the option to go direct to these companies but with so many options it may be difficult to know if you are getting the best deal. Some providers will require you to obtain financial advice, so going direct is limited.
Other options are to use comparison websites such as money.co.uk which aim to take some of the time out of trawling through all the providers yourself, by offering some of the best choices. They provide most of the basic information such as offering £15,000-£500,000 lump sums or 45%-50% loan to value with the AER being somewhere between 3%-4%. However even then there are 6 providers all offering more than three options most of which are very similar, so choosing can still be hard. Its is also important to note that these comparison websites don’t know your situation so the products it may suggest can not be specifically tailored to you.
The other option is to contact an independent financial or mortgage adviser, who is required to have a specialist qualification known as CeRER allowing them to advise on equity release. The benefits of using an independent adviser is that they are independent, this means they have access to the whole of the market and are not tied to any products. This means they can find you the best product and price. It is also important to note that with products such as lifetime mortgages there is an element of risk, so it is always best to use an adviser, with the appropriate qualifications, to ensure that the product and provider you use is the correct for your situation.
Releasing equity from your home is a lifetime commitment, so it’s worth including your family in any decision you make.
This a lifetime mortgage or a home reversion plan. To understand the features and risks, ask for a personalised illustration.
Equity release is not right for everyone. It may affect your entitlement to state benefits and will reduce the value of your estate.
CHECK THAT THIS MORTGAGE WILL MEET YOUR NEEDS IF YOU WANT TO MOVE OR SELL YOUR HOME OR YOU WANT YOUR FAMILY TO INHERIT IT. If YOU ARE IN ANY DOUBT, SEEK INDEPENDENT ADVICE.
THERE WILL BE A FEE FOR MORTGAGE ADVICE. THE PRECISE AMOUNT WILL DEPEND UPON YOUR CIRCUMSTANCES BUT WE ESTIMATE THAT IT WILL BE £1000.