Contributed by Evolve Business Solutions
A lifetime mortgages is a way to turn the equity tied up in your property into a lump sum payment. In recent years, these financial products have become a popular choice for many people who don’t want to downsize, but still want to access the money locked into their home.
How does a lifetime mortgage work?
To gain access to a lifetime mortgage, you will need to be a homeowner, and aged 55 or over. When you take out a lifetime mortgage, you borrow a sum of money against your home. Your house will still belong to you, and you will be able to live there for the rest of your life.
The amount you can borrow will depend on a range of factors, such as the current value of your property, how old you are, and your health situation. With some lifetime mortgages, you can ring-fence a percentage of the value of your home as an inheritance for your loved ones.
Will I have to repay the loan?
Lifetime mortgages differ from traditional mortgages in that you don’t pay back the loan right away. In fact, you won’t have to pay it back during your lifetime. When both you and your partner have passed away, or moved into long term care, your home will be sold. The amount you borrowed, plus the interest that has accrued, will then be repaid to your lifetime mortgage provider. Any money left over will be distributed as part of your estate.
While some products do offer you the chance to repay some of the loan value should you wish to reduce the debt, there are no mandatory repayments necessary when you take out a lifetime mortgage. And should market conditions mean that the sale of your property doesn’t cover the repayment costs of your loan, lifetime mortgage providers are now obliged to write off the loss. This means your beneficiaries will never be asked to repay any money beyond the sale of your property.
Now is the time to look into a lifetime mortgage.
Did you know that lifetime mortgage interest rates are at a near all time low right now? And because rates are fixed for the lifetime of these products, this means the interest on your original loan amount will accrue much more slowly over time. In fact, there’s never been a better time to look at the benefits a lifetime mortgage could provide for your financial future.
Of course, taking out this kind of financial product should never be a decision you take without expert guidance. Which is why Evolve Lifetime offer a fee-free consultation service. They will help you look at all the angles, and decide whether a lifetime mortgage is the right option for you. And if it is, we will then trawl the market, and secure you a great deal. Get in touch today to start the ball rolling.
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