If you’re a retired homeowner, a lifetime mortgage can help you release equity from a fully paid-up property. Enhanced lifetime mortgage schemes use underwriters to approve their loans. These mortgages may, therefore, appeal to homeowners with possible health conditions, looking for a method of maximising the funds tied-up in their home.
Read on to find out more about how these mortgages work.
Like with a lifetime mortgage, these are designed to extract built-up equity in your home, so you can use the money you have already paid into your mortgage to boost your retirement income. You also reserve the right to live in your property, rent free, for life.
The loan is then repaid with the sale of your home when both you and your partner dies or moves into long-term care.
What makes enhanced lifetime mortgages different is that they are specifically designed for those facing health problems in retirement. People who would really benefit from getting the maximum amount of equity released from their home to enhance their quality of life. These mortgages are assessed on a case-by-case basis, by underwriters.
If you would like to find out more about other equity release schemes, take a look at our guide.
An enhanced lifetime mortgage is repaid upon the death of all named homeowners, or when they move out of the home, and into permeant care. The house will then be sold within a year, by your will beneficiaries. They will then organise for the sale proceeds to go back towards paying off the loan provider. Any leftover funds from the sale proceeds will then go to your beneficiaries.
Amana and her husband Harry are looking at enhanced mortgage options, as they would like to keep their home for Amanda. Sadly, Harry will be moving to a nursing home, in the not-so-distant future, as he has recently been diagnosed with Alzheimer’s.
They would like to release £60,000 in order to pay off the rest of their mortgage and meet some of the costs of Harry’s care.
If they had gone for a conventional lifetime mortgage, the maximum amount they could have borrowed would have been £49,000. From approaching an enhanced lifetime mortgage provider and submitting Harry’s doctor’s records, they can now release £70,000.
If you would like to find some more frequently asked questions about equity release, take a look at this article.
Enhanced lifetime mortgages are a risky financial product and one that you should take specialised financial advice for, before making an application.
To get the process started, talk to an independent equity release advisor, they can offer you a free, no-obligation quote.
I need a little help to understand the process. The adviser guided me through everything and was happy to have my family present during the meetings.
Bill Westwood, London
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THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
IF YOU ARE THINKING OF CONSOLIDATION EXISTING BORROWING YOU SHOULD BE AWARE THAT YOU MAY BE EXTENDING THE TERMS OF THE DEBT AND INCREASING THE TOTAL AMOUNT YOU REPAY.
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