DREAM RETIREMENT HOLIDAY
RENEW THE FAMILY CAR
FUND SCHOOL & UNIVERSITY FEES
Mortgage for Life
When in retirement, you can find you have valuable assets but not much Income.
Your home may have a lot of cash tied up in it which you’re not utilising.
“You are Asset Rich but Cash Poor”
The difference between the value of the property and any loan secured against it is called “Equity”.
A question often asked is how do I get access to this equity or cash that is tied up in my most valuable asset. You could do this through a mortgage for life, i.e. Equity Release.
Could I use it to boost my income in retirement or help family at a time when they need my help the most.
Why sell your property you love and buy a smaller house just to release the cash tied up in it.
You may have to leave the area you were happy living in, away from all your family and friends, to allow you to purchase a cheaper and most likely, smaller property.
Why incur selling costs along with buying costs such as stamp duty, legal costs, valuation fees, removal costs, and decoration costs of the new property to name but a few.
Do you want to get rid of your excess furniture as the new smaller house wouldn’t have room for it.
Extra travelling costs may be incurred to visit family now you’ll be living further away from them.
Seems a bit stressful and costly don’t you think ? !
A Better Solution.
Stay where you are, in the house that you love and I’ll arrange a lifetime mortgage secured against your main residence and most valuable asset.
Use this money to repay your existing mortgage if you have one.
No income required to qualify for the mortgage.
No need to pay any capital or interest back on the new mortgage during your lifetime if you don’t want to, so it doesn’t eat into your retirement income.
You can pay the interest if you want to so the initial loan would not increase and eat into your family’s inheritance.
The mortgage is normally repaid on the death of the owner or second death if a couple from the sales proceeds, with the rest going into their estate.
The size of the loan is determined by your age and value of the property.
The older you are, the larger the percentage of the value of your house you can take as a loan. (See table below).
If you are a couple, it is based on the younger age.
Minimum age to qualify is normally 55
This would allow a maximum percentage of around 20% of the value of your home less any outstanding mortgage.
Someone aged 85 might achieve a maximum loan of around 58% of the value of their home.
An Example:
Couple aged 72 and 70 with a property worth £600,000, no outstanding mortgage.
The percentage would be based on age 70 which might allow a maximum Mortgage for Life loan of 45% LTV.
45% of £600,000 would equate to £270,000. You can spend this amount any way you wish.
If your current outstanding mortgage was £120,000, you could use the above Lifetime Mortgage example to clear this off and have no monthly payments moving forward.
You could gift the remaining £150,000 to the family to help them out.
Remember you don’t need an income to qualify for this Mortgage for Life.
How these funds could be put to good use.
A Mortgage for Life could be arranged and used to pay off the existing mortgage with no payment of interest or capital required during the couple’s lifetime. This would reduce the outgoings and free up cash to spend in retirement.
The interest can be rolled up on to the loan and repaid on the second death through the sale of the property or any other assets available. What is left over goes into their estate.
You can service the interest if you didn’t want the initial loan to increase.
You could give family some of their inheritance now while you are still alive to witness the funds being put to good use.
Perhaps a deposit towards a property purchase to help a child or grandchild get on the property ladder.
Use some of the cash to pay for that dream retirement holiday you have always talked about now you have the time and the funds to pay for it.
Replace the family car that is out of warranty and prevent those repair bills from flooding in.
Assist family with expensive school fees or help put them through University to give them the best possible start to their working life.
Purchase a Buy to Let Property outright or use towards the deposit which you could rent out to boost your retirement income.
Refurbish your current home and add that Conservatory you’ve always wanted.
Buy land, build a house on it and then sell it to make a profit.
To qualify, you don’t have to prove or have any income, you don’t have to pay any monthly amount if you don’t want to.
Interest Rates
These are at an all time low with some rates as low as 2.26% fixed for the rest of your life depending on how much less of the maximum loan amount you take. (Figures correct as at December 2020).
No more sleepless nights worrying about how you will repay your current mortgage when it gets to the end of it’s term.
If you can relate to any of the above and would like to hear more, please contact me and I will arrange for an Independent Fully Qualified Adviser in Equity Release Mortgages to contact you to discuss your options and explain in full detail how the plan could work for you.
Please contact Colin at Strategic Innovative Finance Ltd today on 01786 820246, 07850 697544 or e-mail me at colin@sifinance.com or visit my website at www.sifinance.com.
Strategic Innovative Finance Ltd is authorised and regulated by the Financial Conduct Authority, FCA No. 302990 for most regulated mortgages and non- investment insurance business. Remember your home is at risk if you fail to keep up the repayments on a mortgage secured on it.