What is a lifetime mortgage?
It is a long term loan, secured on the property and normally there are no monthly repayments. Instead the interest accumulates and is added to the loan. This overall debt is then repaid either on death, on moving or entering long term care.
This amount owed will naturally grow year on year and will impact on any inheritance but to counter this, the person will have been able to enjoy the money raised and improve his or her quality of life. Also remember that the person continues to be the homeowner and so benefits from any future rise in the property price.
There are many providers of equity release schemes and the details can be complex. The interest rate being charged is obviously important but there are many other factors such as the effect on other benefits or allowances you may be receiving that need to be taken into account. You should always consider taking professional financial advice before making any commitment.
The Money Advice Service (the government supported resource) provides excellent information and also a guide 'Equity Release Schemes' for those wanting to find out more. This can be found here.
Equity Release should not be considered in isolation and should be looked at as part of your overall financial situation in. A qualified adviser can help you in your decision making.
To contact our team about your situation, call 0131 553 4466.