After retirement, there are many adjustments individuals need to make to their lifestyle. Even though you may get a pension, the amount may not be sufficient enough to meet your monthly expenses. As the bills increase, the money you have seems to decrease. This is especially true given that in May 2011 the level of inflation ran higher than average pay increases. For retirement age individuals solutions do exist such as the Halifax Equity Release.
To overcome financial problems in your golden years, opting for roll-up equity release schemes or interest only lifetime mortgages such as the Halifax equity release scheme could be a wise decision. This particular equity release scheme offers a number of benefits to retired individuals. The size of the benefits can be assessed by use of an interest only mortgage calculator.
The Halifax equity release scheme is basically an interest-only lifetime loan. Your property is the guaranteed asset to the equity release loan provider. This will need to be assessed prior to completion. The condition and property type are an important factor.
With this scheme, you only need to pay the monthly interest. This is paid by direct debit on a date of your choice from your selected bank account. Once the property is eventually sold there is no need to make any further payments as the proceeds are primarily used to pay off the pensioner mortgage with the balance passing to the beneficiaries of choice.
Before you opt for an interest only mortgage, there are some eligibility criteria you need to fulfil. You should be above 65, however discretion is provided to people over 55 as long as they are fully retired and have a retirement income to support the proposed mortgage. Therefore, it is a pre requisite that both parties must be retired and must own their main residence.
With a Halifax lifetime mortgage scheme you can increase your income after retirement. As the money released from this plan is not taxable, you can spend it any way you want. This way, you can have peace of mind and enjoy your retirement without any financial worry. Always be aware though the potential effect any cash released could have on any means tested benefits.
While the Halifax equity release sounds great this does not mean it is without disadvantages. There are quite a few that could definitely affect you and your beneficiaries at a later date. While it is true you obtain tax free cash that is not subject to any capital gains taxation on your income taxes, you may use up quite a bit of this cash without a true means of paying it off.
The general consensus with equity release mortgages is that you will pay off the loan by selling your home. You may decide to do this as a means of downsizing. You may sell it to move to a long term care facility. Others remain in their home until death paying interest, but no principle. At death, the home is sold and any remaining funds that did not go to pay the principle balance are given to your beneficiaries. As you can see in any of these scenarios your home is sold.
There are no absolutes of course. Your beneficiaries may have funds to save the home from being sold. The downside is the funds need to be repaid right after death, whereas a sale of the home can take 12 to 18 months depending on the plan.
Always speak with your family about the equity release lifetime mortgage from Halifax before you sign the contracts. They may have a different solution to your retirement desires. They may also help to pay for some of the things you would dearly love to do and have waited to retire to enjoy. While you do have a solution in an interest only mortgage and other lifetime mortgages, you should always consider all the factors before making a decision whether you are on your own or not. Websites such as Lifetime Mortgage Advice provide essential information on all types of schemes and their pros and cons.
Seek the advice of a qualified equity release adviser who can ensure you receive the best advice and have the knowledge to make sure no existing means tested benefits would be affected. For the Halifax equity release scheme you can speak with a mortgage supermarket regulated by the FCA. It is not possible to speak directly with Halifax about their mortgage product as you need to have an intermediary explain the terms. It is imperative that you seek financial advice from an independent source for full understanding.
Our clients are satisfied with their new lives!
National Equity Release Pension Conference, Bath Street, Bakewell, Derbyshire, DE45 1BX.
You can also contact us by phone , or you can send us a message here: