| At a time when the equity release market is | | | | wish to ensure an inheritance for your beneficiaries & |
| downsizing with the withdrawal of many lenders, | | | | want the mortgage on an open-ended basis then |
| alternative funding sources need to be recognised to | | | | look no further than the Halifax. |
| help widen the options available. | | | | It may come as a surprise that such a product may |
| It is in the generic mortgage market that some | | | | be available with a mainstream lender, however it has |
| unique & flexible mortgage products can be sourced | | | | become more evident how this product can fulfill |
| that offer an alternative to the traditional roll-up | | | | in-retirement needs. |
| lifetime mortgage; it is one of these that I write | | | | The Halifax Retirement Home Plan can release cash |
| about. | | | | over a maximum 40 year term, which for someone |
| Upon gathering client details & ascertaining a | | | | already near to, or actually in retirement, should be |
| generous disposable income, sometimes it can be | | | | sufficient! |
| evidenced that monthly payments can be afforded | | | | They will only permit this product up to 75% of the |
| into retirement. However, there is a common | | | | property value, however this is not usually not an |
| misconception that someone in retirement cannot | | | | issue due to the amount of equity in retirees |
| have a mortgage. | | | | properties. Finally, dependent on whether a mortgage |
| This is incorrect. | | | | currently exists, we can also obtain for you a free |
| Providing income multiples can justify the borrowing | | | | valuation & free legal fees. |
| requirements, then research can be sought that | | | | They will also allow the product to use the |
| would provide recommendations of suitable mortgage | | | | mainstream Halifax interest rates such as their 2 year |
| products. | | | | base rate tracker at 2.79%, which for a £50,000 |
| However, providers that can lend into retirement | | | | interest only mortgage would equate to a payment |
| have varying criteria with regards to age & the term | | | | of only £116 per month. |
| permitted & here advice & a knowledge of the | | | | Obviously, consideration must be given to future |
| market comes into the domain of an experienced | | | | potential changes that may affect the mortgage, |
| independent financial adviser. | | | | such as the death a mortgagor which would reduce |
| The options available would be dependent on budget, | | | | the household income & in turn affordability of the |
| but also on attitudes as to how much inheritance is | | | | mortgage. However, this can be catered for with a |
| to be left at the end of the day. Should it be | | | | life insurance policy which would repay the mortgage |
| imperative that the maximum inheritance remain, then | | | | should either party die. |
| a capital & repayment mortgage should be advised. | | | | Alternatively, it should be borne in mind that if the |
| Conversely, if this is not a major issue then an | | | | level of borrowing is kept to within current equity |
| interest only mortgage can be recommended which | | | | release lending limits, then if one party did die, the |
| will maintain the balance at the same level throughout | | | | surviving party could repay the mortgage with an |
| the term of the mortgage. | | | | equity release plan. This would resolve any |
| Some of the major lenders such as Abbey & Alliance | | | | affordability issues, as no monthly payments would |
| & Leicester do have a maximum age of 75, by which | | | | be required thereafter. |
| time the mortgage must be repaid. A few will lend to | | | | Completion times for the Retirement Home plan are |
| age 85 such as Leeds Building Society which does | | | | approximately 4 weeks, which compared to an |
| give more time for the mortgage to run, however, | | | | equity release application of 6-8 weeks is certainly |
| this may only be suitable for capital & repayment | | | | quicker too. Therefore, rather than just assuming |
| mortgages, not interest only mortgages. | | | | equity release is the only solution, ensure you receive |
| Therefore, should you be looking for equity release in | | | | advice from an independent financial adviser. |
| retirement, have surplus monthly disposable income, | | | | |