Lifetime Mortgages
A form of equity release, a lifetime mortgage allows homeowners to take a loan out on their home that is only repaid when they pass away or move to a care home, although interest payments can be made to reduce any debt. Importantly, during the mortgage, you still own the property, and there is no threat of repossession (as long as the terms and conditions of the mortgage are met).
The amount of money you can receive is dependent on a number of factors, including your age(s) and how much your property is worth. Some lifetime mortgage providers also take your health and lifestyle into consideration. You receive the money as a tax-free lump sum.
You should always enrol the services of a equity release qualified mortgage adviser if you’re thinking of getting a lifetime mortgage, as other options may be available to you where Blake Mortgage and Protections Service Limited can help. We are a member of the Equity Release Council and have access to the whole market which means. We will be able to recommend which type of lifetime mortgage best suits your individual needs.
RIO (Retirement Interest Only Mortgages)
Retirement-interest only mortgages (RIOs) are designed to help older borrowers who may struggle to get a standard residential mortgage. They allow you to borrow against your property and only pay back the interest, and not the loan itself, each month. With most RIO mortgages, you only repay the loan when you sell your property, move into residential care or die. But some retirement-interest only mortgages carry terms like a regular mortgage, meaning you either pay them back after a set number of years or when you reach a certain age – 90, for example. Rather than the onerous steps you have to take to prove your income with a standard residential mortgage, you only have to prove that you can afford the interest. Some retirement interest-only mortgages allow you to repay some capital as well as interest. This will cut down the size of your loan over time, meaning that more of your property can be passed onto your loved ones.
*A lifetime mortgage is a long-term commitment which could accumulate interest and is secured against your home. Equity release is not right for everyone and may reduce the value of your estate.