If you are approaching retirement age and looking for ways to finance this stage of your life over and above your pension, you might be interested in learning more about later life lending. There are many plans available to those aged 55+ who are looking to free up cash from their home to help with any plans or goals you have.
Later life lending is a term that describes a number of borrowing plans aimed at providing those usually over the age of 55 with financial capital to aid in their later life goals. These goals may be personal aims, such as paying off a mortgage, home improvement or buying a motorhome/caravan, or it might be to help family members like children or grandchildren get on the property ladder themselves.
Typically, later life lending refers to three main types of plan: standard mortgages, retirement interest-only mortgages (RIO), or equity release, lifetime mortgages. Each of these plans offer something different, with the latter two being more suited to those who are older. For example, equity release plans allow homeowners to release cash that has built up in their home, giving them a lump sum or series of lump sums to use as they see fit. This is either done through a lifetime mortgage or home reversion plan.
Depending on your circumstances, equity release can be a useful way of getting money to pay for things you might otherwise struggle with – such as paying off your mortgage or financing care costs at home. Not only that, but it can also help you fund some of the more enjoyable parts of your retirement, such as building an extension to your home, travelling, or helping out family.
Again, this depends on your circumstances. Lifetime mortgages are the most popular type of equity release; a provider will loan you an amount of money based on the amount of equity there is in your home, with no monthly payments. Only after you have passed away or entered long-term care will it need to be paid back, usually through the sale of your house. Home reversion is another type of equity release which involves you selling all or part of your property to a home reversion company with the express guarantee that you are able to remain in that property until you pass away.
If you are struggling with coming up with funds to help you with your retirement, or the mortgage interest rate increases are leaving you wondering how you will afford to pay your mortgage, later life lending can help you work with the money you already have built up in your home. It’s not for everyone, and there are some caveats, but speaking to an adviser to learn the ins and outs can give you the information you need to make the right decision for your situation. We recommend you only deal with a company that is a member of the Equity Release Council with all the consumer protection that affords.
At Bower, we will understand your unique circumstances and advise you to ensure you are receiving the best plan to meet your objectives. There are plans that allow you to make voluntary repayments and move home, subject to lender criteria. However, early repayment charges may apply in certain circumstances.
Equity release requires paying off any existing mortgage. Any money released, plus accrued interest to be repaid upon death, or moving into long-term care. Equity release will reduce the value of your estate and your entitlement to means-tested benefits now or in the future, and impact long-term care funding.
Bower Home Finance provides independent, impartial whole of market advice with an award-winning customer service experience. Initial advice is provided at no cost to you and without obligation. Only if you choose to proceed and your plan completes, would a typical advice and administration fee of £1,495 be payable.
If you are considering equity release, we strongly recommend that you read our equity release page carefully and talk to one of our specialists before deciding if you wish to proceed.
To find out more about any of the products and the service we provide, please call us on freephone 0800 411 8668, request a call back, email us, or join our live chat you’ll find on our website.
Please be aware that equity release may involve a home reversion plan or lifetime mortgage which is secured against your property. All features and risks are thoroughly explained in your free personalised illustration.
