Equity Release: Helps Later Life Borrowers Enjoy Family Life

Equity release helps later life borrowers enjoy family life

It is a fruitful time to consider equity release due to the record-low interest rates available. A growing number of people, who are approaching or entering retirement with equity in their property, find that receiving a lump-sum through equity releases is an attractive way to help them finance their later life goals.

The growing appeal is in part down to product innovation and increased competition. Lenders are offering increasingly creative and tailored deals, while a host of new entrants to the market have helped to drive prices down. According to Household Finance, remortgages with equity withdrawn became more popular in Q4 2020, with the average value of money withdrawn increasing. Residential remortgages that had equity withdrawn stood at 52 per cent in H2 2020, up from 49 per cent in the previous half of the year, driven by use for deposits for second homes, new buy-to-let (BTL) properties, or to assist with deposits for children buying their first properties.

With access to more than 300 lenders, including traditional lenders, private banks, and niche lenders, we can accommodate all types of profiles working outside of other mortgage brokers’ parameters.

Case profile

A retired couple approached us because they wanted to move to a new build in the next village worth £1.3m, which they had earmarked as a ‘forever home’, to enable them to live closer to their family. The property was in the upper-price bracket due to its sought-after location of the home counties. The couple needed a buying solution to secure their dream property; selling their home would have still left them with a shortfall and unable to meet the mortgage requirements. Their low pension incomes, coupled with their age, meant that traditional mortgage lenders eschewed the couple’s profile.

Solution

We quickly identified that the couple would be eligible for an equity release lifetime mortgage. This enabled the couple to leverage their position to receive a full loan to meet their borrowing requirements. In this instance, the couple could not afford to meet monthly payments; thus, we arranged for the interest charges to be repaid once the house is eventually sold. The children would inherit the equity; therefore, the entire family was part of the decision-making process and agreed that the interest repayment would reduce the total sum received.

We managed to negotiate an excellent interest rate fixed for life. Our client had the good fortune of locking onto the low-interest rates available, and the fixed interest rate for life provided them with comfort. Opting for equity release meant that the clients could spend more time together with their family in their later years, something invaluable to them. The entire family is thrilled with the new arrangement.

Are you looking for a mortgage? No two customers’ circumstances are the same. largemortgageloans.com provide advice that is personalised to your situation. Our core work is contingent on working with niche lenders, which extends to over 300 worldwide. Get in touch to find out more. 

Your home or property may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it. Home reversion plans and lifetime mortgages are complex products. To understand the features and risks, ask for a personalised illustration. Equity release will reduce your estate’s value and may leave nothing to pass on as an inheritance. A cash lump sum or income from an equity release scheme may reduce the borrower’s eligibility to state benefits.

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Your home or property may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it. Changes in the exchange rate may increase the sterling equivalent of your debt. You may have to pay an early repayment charge to your existing lender if you remortgage. Think carefully before securing any other debts against your home.  

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