[img] An interest only lifetime mortgage is like a regular lifetime mortgage, except that you will have to make monthly payments. Once you pass away the loan is paid in full. In order to find out if you can get an interest-only equity release, contact lenders such as Stonehaven.
When it comes to applying for an interest only lifetime mortgage it may be difficult as a lot of lenders do not offer them to retired people. By finding the right lender, you may become fortunate enough to find one. One way to find an interest-only lifetime equity release is by searching over the Internet. Locate an equity release website that allows you to compare schemes from several companies.
• Click on interest-only equity release scheme to find out which companies offer them.
• You can also contact an London equity release adviser in your city to see if you can obtain one.
When it comes to making equity release decisions, it is best to speak with a professional. By going at it alone, you can make a mistake that can cause you to lose your home. On the site, it will have an interactive map that you can pinpoint your city and locate an equity release adviser. It will have the equity release adviser’s contact information.
Benefits to Interest Only Products
The benefits of getting an interest-only lifetime equity release are that you not only can remain in your home while making payments, but you may release more equity than with a regular lifetime mortgage. When you receive the money, it can be used for anything that you like. Most retired people use the money to help them with their monthly bills. Also, you will still own the property, which means if it increases in value, you will benefit from it.
There are downsides to an interest-only retiree mortgages including the amount that you leave to a loved one may be less. If you fail to make your payments on time each month, your home can be repossessed. If you know that you will be late making a payment, always contact the lender. Also, you may have to pay an early repayment fee if you happen to repay the loan early.
Get Proper Advice
Advice is free. Take advantage of it when your family inheritance is at stake. Do not let your children deal with losing their childhood home because they were unaware of your retirement decisions or because you chose the wrong product.
Independent financial advisers can help you locate proper lifetime mortgages for your situation. You can ask questions with regard to specific details and worries. You can also find out if there are different products on the market that might work better such as home reversion where you sell the home for money, but do not risk the repayment of a principle balance on a lifetime mortgage.
Speak with your family so they are aware of what is going on. Perhaps your children are able to help you during retirement when money is tight to avoid selling a piece of your home or taking out a new mortgage on it.
It is important that you not leave a difficult situation that might be unresolved or cause dissatisfaction among the family left behind.
Remember one important detail about any lifetime mortgage product: the companies supplying these mortgages are in the business of making money. They provide a long term investment because the rewards are expected to be very fruitful for them. This means that you should look out for yourself and your family, not bend to the first provider you come across willing to offer an interest only product.
Calculate the Result
You have only calculators for mortgages and retirement mortgages. Take a minute to assess your situation, the potential value of your home, the requirements of releasing up to 80% of the equity, and the monthly interest payment. This assessment will help you make a proper decision regarding your mortgage needs. As you do this consider a pro and con list for your particular situation as another way to fully consider your options.
As you can clearly see there are many factors to take into account and plans to consider. Many people thinking they know best have realised at a later date they have made an incorrect decision. It may not be too detrimental, however it could still have cost them, or their beneficiaries £1,000’s over the longer term when it comes to interest only lifetime mortgage.
Equity release plans have been on the market for many years now and have proven to be a good solution particularly for many people that want to ensure the safety of their last days. The protection of inheritance can sometimes be tricky so always be sure you know what decision you’re making in the case of mortgages. A Stonehaven Interest Select Lite Equity Release Plan may be the best answer to your problems, seeing it is effective, while also providing for all the customer care you may need.
Stonehaven offers four options on its interest only lifetime mortgage products; the Stonehaven Interest Select Lite and the Interest Select, the Interest Select Plus and the Interest Select Max.
From these four alternatives, the one that seems to suit all the needs one may want is the Stonehaven Interest Select Lite Plan with the lowest interest rate, currently 5.99%. It appears to fit best with individuals that would like to release only a small equity in return for the lowest interest rate. The suitability of applicants for this arrangement depends on two important factors - the age and the value of your property. Do not be afraid by an application process, as these happen every day and a team of specialized equity release advisers always makes the best decision in evaluating which option is the best for you.
As is the case of other equity release plans, the Stonehaven range of Interest Select plans base themselves on the release of a specific percent of the main residence. This begins with a minimum release of just £10,000, a number that is considerably lower in comparison with other strategies of this kind. The plans start at the age of 55 and accepts properties with a value no less than £75,000. You always benefit from an excellent freedom of choice while being involved in this type of plan and you may always change more or less important data concerning your account and the amount of money you have to deposit every month.
Stonehaven is just one provider of lifetime mortgage plans with an interest only caveat. It is by no means the only option you have as a homeowner. While this article does suggest that the Stonehaven plans might be right for you, also consider comparing the different products on the market to ensure that other companies do not offer a better interest rate or conditions for their loans.
Additionally, the only plans in discussion throughout the article have been interest only. Bear in mind that you have more options such as drawdown, lump sum, and ill health lifetime mortgages. Drawdown mortgages allow access to an account of funds where the interest only adheres to the money you used rather than the full amount of funds available. If you need more money quickly the lump sum option ensures you access to a larger payment at the outset where interest compounds. The difference with these two lifetime mortgages is that the interest adds onto the loan until you pay the debt back.
The debt including the interest is paid at the end of the period you wish to live in that home or your death just as the interest select plans for retirees from Stonehaven.
The ill health lifetime mortgage pays out for a person who suffers from a chronic disease that could potentially end a life earlier than average. Diabetes, cancer, smoke related illnesses and many others could potentially lower a person’s lifespan. Given that this might happen and the need for money might be now, a larger lump sum than all other lifetime mortgage products is offered.
Home reversion is the last choice you have as a mortgage borrower. This is totally different in that you do not need a mortgage or loan. You sell part of your home. For some this is better than paying back a debt at the end of your life.
The Stonehaven Interest Select Lite plan is recommended especially to people that would like to be sure of the safety of their heritage, not wanting the roll-up nature of traditional equity release schemes. The system was created precisely for aging people and soon to be pensioners, and is currently available on the majority the UK territory. Remember, when dealing with property and the future you have ahead of you, you can never be too sure so contact an equity release specialist to discuss which one of the Stonehaven equity release plans is the best by gathering as much information as possible.
The world is changing fast and so do the prices that we pay. It would have been nice if our salaries grew accordingly, but sadly this is not the case. Just imagine if you could get more money from the things financial firms and services that you sold or provided in the past! Well, the good news is that you can actually do that with your property. With a normal equity release plan, you can actually still squeeze a considerable sum of money from your existing property on top of what you already received or are scheduled to get. You also have equity release remortgage, which is available for individuals that already have a mortgage and wish to pay off with a new loan.
Despite all the obvious pros of re-mortgaging your property at more advantageous terms you shouldn’t get all starry-eyed. Study the offered contract, look for hidden
Revise the old or get a new equity release plan from an establishment you trust or one that has a good track record over the years. Make sure to consult an equity release specialist concerning every paragraph of the contract that you have doubts about. Get a better deal, not a shady one.
A remortgage is only viable if you like the economic crises situation you are going to get into. By finding out the deals available you have a little help in choosing a better plan. To help you get started the following is going to look at an overview of product names you might remortgage for. These are specific to individuals who are in retirement and need to get that monthly payment gone.
• A drawdown lifetime mortgage is an equity release with a line of credit attached. You can take out the money you need such as a monthly payment for expenses. This does work if you have a small mortgage to do away with. However, if you have a large market the restrictions on the amount you can take out at first may not be advantageous. Luckily only the money you use gets charged interest.
• Lump sum lifetime mortgages are something you can remortgage for with a larger sum of money to help you make payments to get your debts gone. Interest is charged on the whole amount and until the loan is paid back at death or move to a care facility.
• If you have a little money to make payments, but also wish for a lump sum consider the interest only plan. In this plan, you pay out monthly interest installments keeping your principal balance the same until it is paid off.
• Illness can work in your favor if you need a large lump sum for paying off debts as there is a lifetime mortgage specific to individuals with a shorter life expectancy. Cancer, diabetes, heart issues, and obesity are some of the health conditions you can get this type of mortgage with.
The equity release switch plans tool can help people complete analysis of their existing equity release scheme and see whether it would be financially viable to complete an equity release remortgage. Call us to speak to your equity in your home local switch plans consultant.
If you have reached the age where you can retire or you are planning for your retirement, it is crucial to think about what mortgage platform can be right for you. Mortgages for pensioners have specific advantages among some of which include the following:-
Added choice: The Council of Mortgage Lenders, the trade association for mortgages in the UK found that at the start of 2012, there were more than 25,000 remortgage loans being taken out. Remortgages are one type of mortgage that pensioners can choose because they give people more choice over how to use cash raised from the mortgage deal. This is ideal if pensioners are looking for ways to increase cash in their financial portfolios, or if pensioners want to help to create some sort of liquidity for their family members.
Repayment clause: The golden question you should be asking yourself is does the mortgage lender want repayment? Pensioners need to look for good deals on repayment or even some mortgage deals do not have repayment included in them, in which case this is something to seek out with the help of a financial adviser.
Income: The good thing about mortgages for pensioners is the perceived value that added income gives people. In these tough economic times, it is no surprise that pensioners want to have reliable income streams and a mortgage for a pensioner can give him or her that. The most important thing to remember is how much money you are after when you are trying to figure out which pensioner mortgage is right for you.
When starting your research into the available schemes and pensioner mortgages, it is important to consider whether your circumstances and your health will allow you to see the mortgage through. If you are in good shape and your doctor even recommends that your health is good, you should consider a pensioner mortgage which can run well into retirement because it can fit into your lifestyle.
Another important thing to remember about these types of mortgages is that lenders want to look good to you as a pensioner which is why you should ask as many questions as possible about your mortgage. Shop around for the best equity release deal to avoid any disappointment.
Alternatives to Mortgages
This article has mainly focused on the ability to gain a mortgage in order to provide you with money for your retirement. You have so many different options that it would be remiss of this article not to mention home reversion.
Home reversion is totally different than the other financial products mentioned because it is not a mortgage at all. Rather this option provides you with an advantage to no repayment. You never pay back the money you receive under this product option. The reason - you have just sold a portion of your home. The thing about lifetime mortgage products in discussion here is that most people have to sell their home at death or move to a care facility because all other money has been used.
With home reversion you sell your home, gain equity, and your family has nothing to worry about in terms of payments. Rather they are rewarded with a portion of the home in cash that is their inheritance, providing you did not sell the majority of your home and the house did not devalue as you aged.
The reason many individuals do not like this option is the simple fact that you sell your home while you still live in it. For some this takes away control. If this is not reasonable to you, then you certainly have plenty of mortgages to consider as a pensioner. With no payments, minimum payments, and even a chance to repay the mortgages before death there is no reason not to look at the different advantages and disadvantages of the myriad of products available to you on the market.
Always keep your family apprised of what you have decided with your home too. Your family is going to face the changes you have made in your life, so knowing about it beforehand can help prepare them to the loss of the family home.
This question lingers in many people’s minds, especially those closing on the 55 year mark, as many people at this age are only worried about owning a house. Having a mortgage during your retirement comes with variable advantages and disadvantages. This is the reason why you need to evaluate your options well before you retire on when to clear your mortgage. Here are a few points to consider before you can make a solid decision on mortgage repayment or gaining a new mortgage in retirement.
The benefit of having a mortgage in retirement is clear. The first benefit is that, during your retirement years, you have fewer expenses to handle. This means paying for your mortgage will be easier. However, this is greatly dictated by the amount of money you have in your bank account, or on our pension income. If you have enough cash in your bank accounts, it will be safe and easy for you to pay off the mortgage at retirement.
However, if you have less money in your bank account, higher chances are you will be unable to pay off the mortgage in full, which can be stressing. However, Paying off the mortgage before you retire gives you a piece of mind knowing that, as long as the mortgage bill is gone, you will then have lesser bills to handle, which can be manageable.
Most people are mostly overwhelmed by mortgage rates at old age, as they do not have any other means of income apart from their savings and pension. Paying the mortgage in advance however saves you all that and gives you a chance to enjoy your pension money in style.
Another advantage in paying for a mortgage before retirement is that, you can apply for annuity using the house. For you to go for an annuity plan, you must either have enough money to pay for the plan, or have an asset to use for London equity release. Many people use their real estates and homes for equity release so that they can have a better life. If you pay your mortgage bills in time and get to own the house, you are then better placed to apply for an annuity plan with the house, as compared to someone who hasn’t cleared his mortgage bills.
Annuity plans used to be the only retirement option for a retiree and a mortgage situation. Now this is not the case. In fact you have plenty of other options that will help you gain what you desire without the added stress.
The main reason to consider a mortgage during your retirement is the debts you hold at the time of retirement. You want to be debt free. With no debt life is easy and what pension comes out of your accounts is for you to spend. Unfortunately many individuals would have to use up their entire pension to pay for the outstanding mortgage leaving them without anything.
Lifetime mortgages provide a different answer. With this type of equity release you can pay your other mortgage off in full and you end up with no monthly payment. The biggest expense in your life is now gone and so is the worry. This is because the lifetime mortgage is repaid at the end of your life or if you move to a retirement community.
There is a drawback. Interest will accrue like any other mortgage, but there are competitive rates, so you do not have to worry over much as long as you get the right deal. The next drawback is that in most cases the house has to be sold at the end in order to cover the entire mortgage. With the equity clause that states no negative equity can result with the loan you do not have to be concerned that your housing value drops or that the interest rate will increase so that you leave behind debt to be repaid by your family.
Mortgage in retirement does not sound so bad right? It is not as long as you choose the right deal for you and your family. It takes a little research and learning the types of lifetime mortgages available as they do carry different advantages to each other. Speak with advisers, your family, and eventually reach a decision that is going to make your retirement all that it should be. It should be fun, relaxing, and filled with entertainments you never had time for during your working life.
If the three words mortgage in retirement send a chilling shudder right down the length of your spine, it may well be worth your while to read this article and find out how this can actually be a very welcome idea for people that have gone past the age of retirement.
You see, when we say mortgage in retirement, we do not mean that you will still be paying off the cost of your property when you get past the age of 65. No, instead, we mean that you could actually benefit from some income and this is borrowed against the equity that you hold in your property.
So, now that you are starting to relax a little more - read on to find out how this works. The proper term for this type of equity plan is a lifetime mortgage. This basically means that you can borrow a certain percentage of the equity of your property (varying with age) and not have to worry about it until the unfortunate time of your death.
The main advantage of any mortgage is to provide you with a home, but in this case a mortgage can be used to give back some of the money invested in your home. As you are in retirement and funds can run a little low due to pensions and annuities you might have, gaining a little cash to spend is helpful to your overall well being.
The cash is tax free and can be spent anyway you wish. This means home repairs, that dream holiday, and even on your grandchildren is how you can spend the money.
These various products are provided from the age of 55 and some are limited to your age of 75 meaning you cannot take out certain mortgages if you are older than 75.
You do want to be wise in how you spend it for there are drawbacks to this type of product.
Of course, if you are planning to leave an inheritance to loved ones - this will very much be effected by your taking out such a plan - so do bear this in mind beforehand. However, if you are struggling to make ends meet in later years, the majority of relatives would not like to see you struggling and would much rather see you enjoying your time in retirement.
Inheritance is only going to be as large as the equity you leave in your home. If you use a large lump sum of equity and have a higher than average interest rate than these plans typically allow then it might become difficult to leave behind inheritance. In many situations the house is sold to pay the debt so the family home can be in question too. Of course your relatives do not want you to suffer and if your home is to be sold now or later, it is a good idea to take advantage of products that can help now in terms of money.
There are some products that lower the risk of inheritance being used up before you die. Interest only mortgages offer a low monthly payment of interest only, whereby the principle of the loan remains.
Home reversion is an option in which you sell a part of your London home, but get to live out your days happily in the home you worked to pay for. You get a lump sum of money to use as you wish. It is cash free too. The advantage is no pay off in the end. Your entire house is sold and the portion that belongs to your family is provided in inheritance.
For some it is not comfortable to sell their homes. You also have to be at least 65 to enter into this agreement. It is all above board and monitored by SHIP. SHIP is a regulatory agency that protects against real estate issues. It is also the authority that ensures you have a lifetime tenancy, rent free, agreement to remain in the house no matter the portion of home sold. Therefore, if a retirement mortgage is still scary after reading this article you have other options.
If this sounds like a good idea to you, do yourself a favour and seek professional financial advice before you go ahead with any such plan like mortgage in retirement. Some of these plans can work out to be very useful, but they will vary and not all plans will be the same.
Having a mortgage in retirement can be very strenuous when it comes to final repayment because in most cases there is a drop in income when retirement arrives. This is the major reason why most people consider repayment of mortgages before their retirement to avoid battling with financial matters when they are supposed to be relaxed. However, even in light of the above, these mortgages are still a big possibility especially now when financial institutions are constricting their sale due to FCA intervention.
When you are considering taking a mortgage in retirement or at least having it paid off before retirement, there are a few questions that you will need to evaluate. The first thing you should think about is how the mortgage will help you in terms of benefits. The interest rate that you are likely to receive by securing the mortgage should dictate the entire process, because failing to plan may come with irregularities.
People thinking of mortgages always have varied investment plans and the returns brought about by their investments largely depend on the type of investment. For example, someone investing in a savings account will have a return in interest rates, but it will so low and slow, sometimes almost unnoticeable. Someone else investing in buying shares or in the stock market will reap big and fast although the risk involved is much higher.
Tax issues also play a big role in decision making where the balance on a mortgage gets lower and lower upon each payment. Tax thresholds are increased for retirees because of their low income capacity, therefore the bulk of what they pay services the principal rather than interest.
The other very important thing to think about is the amount you have as savings after retirement. Paying off a mortgage at this crucial period can be very tricky because it means it might end up delving into your savings, sometimes entirely. This scenario leaves you in a worse financial situation which limits you from doing other important duties.
Perhaps you have to gain a new mortgage in order to pay off the mortgage you currently have? Perhaps you have paid off your mortgage, but now you have a cash flow issue? If either of these scenarios sounds like something that is affecting you do not worry. There are solutions in the form of lifetime mortgages.
This is a mortgage you do not have to worry about having in retirement. The reason is how these products work. The traditional mortgage requires that you make a payment each month in order to pay off some of the principle amount of the loan and interest that has accrued.
Lifetime mortgages do not work this way. You have no payment unless you elect to go with the one product, interest only that requires a monthly payment. You still have interest accruing with this type of mortgage, but the interest compounds onto the principle of the loan. This means that at time of repayment the loan and its interest is due. Of course you may be expired by then or moving into a long term care facility.
In this situation your home is sold to pay for the lifetime mortgage you held on the account. The home might cover the entire loan or there may be inheritance for your family. It depends on the interest charged and the lump sum or withdrawals you made on your life on credit. The key factor is that you can enjoy retirement without worry because your original mortgage is gone and there is a plan to pay off the new one without stripping your finances down to the very bottom.
You have one choice in paying off the existing mortgage and yet not gaining a new one. This is home reversion. This type of plan sells a portion of your home now, where you gain a lifetime tenancy agreement, rent free living, and there is no mortgage to pay back at the end of your life or move to a care location. This works for some and for others it gives up a piece of control on property they worked so hard to gain.
A mortgage in retirement might be ideal for you or it may not. The only way to know is to start looking at your options and choose the best one. Let financial advisers help you discover what might work for your situation. Consider and compare all products and eventually choose what you like best among them.
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