The issue with getting a mortgage in later years is proving income.
There are many older people who find themselves in a predicament – with little or no income because they are not working and relying on a pension but with plenty of equity in their home, which lenders will not let them release because they haven’t got the income to support that borrowing. Many of these people would rather not sell up and downsize, leaving the family home in order to free up cash to live on.
Equity release offers a possible solution for the ‘asset rich, cash poor’, allowing them to release cash to live on which is then paid back after they die and the house is sold. With more providers entering the market, rates have fallen so equity release is not as expensive as it was in the past. Equity release isn’t a ‘cheap’ solution but can be the right one for certain borrwers.
Whilst we are unable to provide you with advice on lifetime mortgages/equity release, we can introduce you to an authorised and regulated Financial Adviser who can provide you with specialist advice.
Please Note: A Lifetime Mortgage will reduce the value of your estate and may affect your entitlement to means-tested benefits and tax status. The impact of not servicing monthly interest payments on a Lifetime Mortgage is that the outstanding debt can grow rapidly, thus reducing the value of your estate. For example, if the interest rate was 7% a year, a £50,000 loan would double to £100,000 after 10 years assuming no repayments are made. This is an example for illustrative purposes only and personalised advice and recommendations should be sought from a qualified professional. You are strongly advised to register a lasting power of attorney. This will allow your affairs to be managed by somebody else if your mental abilities significantly decline.