Equity Release - Why Do I Need a Lifetime Mortgage?

Release equity from your home to take a trip

Many people use Equity Release to make home improvements, to enhance their lifestyle or to make a gift to a family member. This might be one of those essential repairs or home improvements you’ve been putting off or a holiday you didn't think you could afford. Perhaps you want to help a child or grandchild by giving them an “early inheritance”. Whatever your reasons or hopes, contact us to find out more.

The most popular type of equity release plan is called a Lifetime Mortgage, which allows you to release equity, but still retain legal ownership of your home. Due to the complex nature of a Lifetime Mortgage and the number of plans available, the first step is to contact us to discuss your requirements and circumstances.

Our fully-qualified equity release adviser will take the time to get to know you, either in the comfort of your own home, or over the phone - whichever you prefer - and they will recommend the most suitable option for you and your circumstances. Rest assured, if equity release isn't right for you, we will tell you. You are welcome to invite family members or a trusted friend to our meetings, if you wish.

All of the plans we recommend are approved by the Equity Release Council and come with several protections, including the “no negative equity” guarantee, which means you will never owe more than the value of your home.

The second part of the Lifetime Mortgage process requires the services of a solicitor to ensure all the legal aspects of the Equity Release transaction are carried out correctly and that you fully understand your plan.

Whilst any financial advice on Lifetime Mortgage plans will be provided by us, the legal advice will be provided by your appointed firm of solicitors.

For more information, please call us today on: 01634 314474 or email us at gtfm@blueyonder.co.uk

Lifetime Mortgage Advice from Graham Thomas Financial Management, covering Kent and the South East

The Benefits of a Lifetime Mortgage

Lifetime Mortgages are regulated by the FCA and can be a safe way to access some of the equity tied up in your property. This tax-free cash can be taken as a lump sum or in instalments, and the best thing is it can be used however you want.

Rising house prices in the UK means that a large proportion of homeowners’ wealth is tied into their property, which can make it difficult to access. The advantage of a Lifetime Mortgage is that it gives you money to spend now, rather than leaving it locked away in your home.

If your home has increased in value over the years, equity release can help you access some of that money to supplement your retirement income or provide a lump sum.

You will have tax-free cash to spend on whatever you choose

You won't have to pay tax on the money you release. You could use the money to:

  • Pay off your mortgage or debts
  • Make improvements on your home
  • Top up your income and live more comfortably
  • Help loved ones
  • Pay for something for yourself, like a holiday
  • Spend on whatever you want

The main advantages of a Lifetime Mortgage

You can continue to live in your own home for the rest of your life or until you move into residential care.

The “no negative equity” guarantee means that you will not have to repay more than the value of your home and that your estate will never owe more than the property is worth when it is sold.

The tax-free cash that you release can be used for anything you choose, from home improvements, paying off a mortgage or debt, or for a holiday.

The flexibility of modern equity release plans means that you can release the money as a lump sum, or a lump sum with a drawdown facility, which allows you to take additional lump sums in the future.

Drawbacks of a Lifetime Mortgage

There can be drawbacks to a Lifetime Mortgage, which is why we check that it is right for you.

  • Even with Inheritance Protection, taking a Lifetime Mortgage is likely to reduce how much you can leave as an inheritance
  • If you are receiving certain benefits, taking a lifetime mortgage could impact your entitlement to these benefits
  • Usually the interest rates for a Lifetime Mortgage are higher than the rates charged for a traditional mortgage

A lifetime mortgage is a long term commitment which could accumulate interest and is secured against your home. Equity release is not right for everyone and may reduce the value of your estate.