Realise your retirement goals with later life lending mortgages
Later Life Lending, a bit of a generic term that means borrowing money, secured against residential property, past normal retirement age for various reasons.
The two main processes for achieving this are Equity Release Loans and Retirement Interest only Mortgages (RIO).
Whilst there are many differences between the two, the big ones are these: -
1) Equity Release (ER). The amount you can borrow is based on the value of your property and age at the time of application, not your income. You can, but do not have to, make monthly payments and the debt is usually settled from the value of the property when you either go into care, or die.
2) Retirement Interest Only (RIO). Borrowing against the value of your property beyond your normal retirement date. The amount you can borrow is based on both the value of your property and your income in retirement. In general, you must make monthly interest payments to the lender. The market is still changing and after reaching a certain age, interest roll-up may be allowed with some select lenders. The debt must be repaid at end of term. Converting to ER is a consideration at that time.
The Bank of Mum & Dad or Gran and Grandad – Aka Later Life Lending
Family’s want to help their children onto the property ladder. It is difficult nowadays to save whilst renting, house prices are high, high percentage mortgage loans are not that easy to come by and building up that necessary purchase deposit, can take a very long time.
Or maybe you just want them out of your house!
Improved, more flexible, and fairer competitive products, mean later life lending is now a growing market and worth considering. Help your children or grandchildren to buy their first home. You will be surprised at what is now achievable. You were probably going to leave them the money anyway, so why not check out what you can do now.
You can still use the products for other reasons, boosting your own retirement income, paying off your mortgage to stop that monthly outgoing, or even to buy a holiday home. Your equity, your choice, we can help with our qualified advisers.
55+ and would like to know more, contact Charles Derby Mortgage Bureau today.
Equity release will reduce the value of your estate and can affect your eligibility for means tested benefits.
Think carefully before securing debt against your home, your home may be repossessed if you do not keep up repayments on your mortgage.
Things to consider
Mortgage debt is not such a bad thing, providing you have the income and/or assets in retirement to continue making the interest payments. Unfortunately, most lenders want their money back as you come to the end of the term, which is usually set near to, or at retirement, meaning whether you can comfortably afford to continue paying past your retirement age, is moot. Later life lenders are, however, offering increased flexibility as well as a wider choice of products, and Charles Derby Mortgage Bureau has access to specialist lenders who will allow you to have a Retirement Interest Only (RIO) mortgage up to age 95, subject to certain criteria being met. This is a mortgage, not equity release, so normal mortgage terms apply, meaning you will have monthly interest payments to make and at the end of term a balance to be repaid and now be offered a Retirement Interest Only mortgage. RIO for short, caters for those who, for whatever reason are not ready, or do not want to pay off their mortgage. We're able to provide whole of market access, and an adviser committed to finding the perfect product for you.
Later life lending can help you fulfill any the following goals:
- Retire when you want
- Carry out renovation works
- Stay in your home for life
- Help your family financially
- Boost monthly income
- Clear debts
- Go on a well-deserved vacation
- Repay your interest only mortgage
- Mitigate an inheritance tax liability
If you’re keen to release equity from your property and wish to speak to our mortgage and protection advisors about your current circumstances, please do not hesitate to call a member of our team today on 0330 094 5476 , or send us a message and we’ll be back in touch as soon as possible.