A 10 Point Guide To Lifetime Mortgages

If you are considering an equity release scheme, chances are that you will have encountered the term – lifetime mortgage – on a few occasions.

Lifetime mortgages are often considered to be the most popular form of equity release schemes but what do you need to know about this form of equity release? Below is a snapshot guide to lifetime mortgages that should give you a better understanding of what they are.

1.) Lifetime mortgages are available to homeowners over the age of 55 years old.

2.) They provide you with a tax-free lump sum taken fromthe value of your property. The amount you can release will depend on your age and value of the property.

3.) There are no monthly repayments, instead the interest is rolled up on the original amount over the duration of your life, or until you move into long-term care or your property is sold.

4.) This can lead to a high level of interest, especially if you continue to live in the property for many years. However, when off-set against any house price increases, you may still be able to leave an inheritance.

5.) Make sure your lifetime mortgage is offered by a Safe Home Income Plans (SHIP) recognised provider or by a provider offering similar guidelines. This will ensure that your lifetime mortgage has a no negative equity guarantee, meaning you will never owe more than the value of your house.

6.) This particular equity release scheme allows you to continue to own 100% of your property so that you can benefit from any house price increases.

7.) You are free to move house and take the lifetime mortgage with you. This gives you flexibility to live your life in retirement exactly how you want to and not to be tied to living in your current property.

8.) There are options to repay the lifetime mortgage early, however, there may be early repayment charges that are payable.

9.) Because it is a popular product you are likely to find a number of preferential deals with low, fixed interest rates.

10.) All lifetime mortgages are regulated by the FSA (Financial Services Authority) so you can be rest assured you and the lifetime mortgage product you purchase are covered by their rules and guidance.

Related posts:

1. Benefits of Lifetime Mortgages
2. Beginners guide to Equity Release Loans
3. Is an Equity Release Lifetime Mortgage for you?
4. Guide To Home Equity Release Plans