A lifetime mortgage application like any other mortgage application must go through rigorous application post sale legal checks. This will include checking the property ownership, any adverse credit and the property boundaries. Sometimes legal fractures start appearing as occasionally matters arise where a previous conveyancing solicitor may have overlooked certain issues.
Boundary disputes are becoming more prevalent and it is usually down to the virtues of mediation that resolves the closest of battles sometimes. Here both parties’ solicitors can broker a deal to resolve each party’s rights and future ownership of the aforementioned piece of land, which may cause the trouble. To avoid these kinds of disputes, one needs to seek professional help. This will make the overall equity release process easier and one can follow the simple steps not forgetting any third parties involved.
The first thing is to decide whether you want to take out a home reversion plan or a lifetime mortgage, and if you are not sure about the best option you can always seek help. A professional financial equity release adviser will analyse your current financial situation, your current mortgage if any, as well as recommend the best lifetime mortgage plan for you. Additionally, they will also take time to explain how the chosen equity release plan will affect your eligibility for tax benefits and or welfare rights.
Home Reversion versus Lifetime Mortgages
Home reversion allows the homeowner to sell all or part of their property. You have an option of selling 20% of your home for funds to use on expenses. The 20% you sell will not be at current market value. Instead, you are given a reduced payment amount because the home reversion provider is waiting to sell the property. You get to live in the property no matter the amount you sell, including 100%. You live there under a lifetime tenancy agreement. It is only when you decide to move out or die that the home reversion provider can sell the entire home, obtaining their investment.
A lifetime mortgage is an actual loan on property you own and retain ownership for. It is different since you have interest accruing for as long as the equity release is in place. Only when you decide to move out or die will the home be sold to pay off the mortgage. The heirs you leave behind make the sale and any debts outstanding will need to be paid off. As you can tell there are differences between both plans, which is why your family should be a part of the decision.
Before you complete an application form, you need to discuss with your family the decision you are about to make, since this will ultimately affect them too. Apparently, you find that many children are financially secure and understand the need for their parents to release equity funds to make their retirement more pleasurable. However, it is also good to let your next of kin know what you are planning, since this may mean that they will not inherit 100% of your home. Additionally, they will need to understand the implications of repaying the plan in case of death, the sale of the home, or when one needs to move into long term care.
After deciding on the lifetime mortgage to take and discussing with the family, the next step will be to complete the application form, which you can do with the assistance of your broker. Then submit it to the provider along with the necessary information to facilitate a property valuation. While one does this, it is important that they understand the terms and conditions of the plan, and in order to do this properly, one can work with a solicitor in order to understand the terms and conditions fully before eventually signing the equity release mortgage deed. After signing all the paperwork and the solicitors have completed their legal checks, the money is then released and paid via their solicitor into an account of their choice or have a cheque made payable to them. They then have the freedom to spend the equity release proceeds as they wish as no constraints are placed on how they decide to spend their money.
The lifetime mortgage application can be filled out at a homeowner’s convenience. Even when you fill out the application it does not mean you are under obligation to pursue an equity release scheme. The application begins the process in the event you and your family decide home reversion or lifetime mortgage fits your needs.
Afterwards if you do have regrets over the option you originally chose or perhaps a new ground breaking incentive equity release plan came onto the market you have the option to switch equity release plans, for a fee.
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