For most retiree’s, property is often their biggest asset and due to a combination of poor pension provisions, people living longer and an increase in housing prices, more and more of our mature population are becoming asset rich and cash poor.
The reality is many over 55’s are in a position where they have outstanding interest only mortgages without any means to repay them. Alternatively, they may be in this position due to an under performing endowment. They have all of their wealth tied up in their home without the ability to access it for things such as urgent home improvements or even simply to pay for a holiday and enjoy their retirement.
Equity Release gives people aged 55 and over whom have money tied up in their home, the ability to release equity from the property without having to sell it or make monthly repayments. The homeowner can decide to take a lump sum or draw down smaller regular amounts (or a combination of both) from the value of their house whilst still residing in it. For many, this can also be an opportunity to repay an interest only mortgage.
AdviserLoan offer a range of Lifetime Mortgage solutions whereby clients can take out a mortgage on their property (provided it is their main residence) and still retain ownership. We do not currently offer Home Reversion Plans.Is Equity Release the right option for your client?
Whilst a Lifetime Mortgage can be a great solution for many, there are other options they may want to consider first. The following key questions can help you determine whether Equity Release is the right option for them:
- Would they consider taking in a lodger if they have the capacity to?
- Would selling and downsizing be an option?
- Are they eligible for any state benefits or local authority grants?
- Do they have access to investments or savings that could be used instead?
- Do they have a family member who could help?
If all of the alternative options above have been given careful consideration and discounted by your clients , then Equity Release could be for them.Why choose it?
A Lifetime Mortgage can be an excellent option for clients looking to raise money to subsidise their retirement income, repay an interest only mortgage, fund home improvements, provide a house deposit for their children or simply tap into their asset wealth to allow them to enjoy their later years in whichever way they wish.
- The client can protect some of the value of the property as inheritance for family
- Many offer the option to make repayments or at least service the interest
- Most allow the interest to roll up if required (loan amount and any accrued interest is repaid upon death or moving into long term care) this option means the applicants are required to make no payments if they wish.
- Clients have the right to remain in the property until death or move into long term care
- Only pay interest on the amount withdrawn
- No Negative Equity Guarantee (Client or their estate will not be liable for any negative balance on the loan once the property is sold)
- Some lenders offer the right to move to another property
*(t&c’s apply to all of the above)Criteria
The strict criteria involved in the process of a Lifetime Mortgage can be challenging, but here are a few of the key points:
- Available to individuals aged 55 and over
- Borrow between 20% and 50% of the value of your property dependant on age
- Enhanced rates available for applicants with certain health conditions
- Interest rates are fixed or capped variable
- No fixed term
- An attorney can act on behalf of an applicant if the homeowners have lost mental capacity providing they have the required permissions and are acting on the best wishes of the applicants
- Early repayment charges can be fixed or gilt linked
- Downsizing protection
Why refer to us?
Benefits for your client
We pride ourselves on excellent customer service and aim to be simple fast and efficient in all our dealings with them.
We provide a face-to-face meeting so we fully understand their needs and objectives. In our experience, this is highly beneficial and ensures they appreciate both the benefits and implications of a Lifetime Mortgage.
We will advise them throughout the process, keeping them up to date with each stage of their application and answering any questions they may have, no matter how small.Benefits for you
AdviserLoan are specialists in the field of Equity Release. We use our knowledge and expertise to research the right product for your client, so you don’t have to.
As an adviser referring a client to us, you will receive 50% of the gross procuration fee.
We will keep you up to date with the progress of your client’s case throughout the process and will only discuss the product in question with your clientProtection and Peace of mind
We are members of the Equity Release Council – The UK’s leading industry body for Equity Release
We are fully insured. Our Professional indemnity Insurance policy provides cover of £1m
Passionate about Treating Customers Fairly. We put your client’s interests at the heart of everything we do and always provide honest and up front information regarding our fees and services