Lifetime Mortgages / Regulated Equity Release
Most banks do not lend over retirement age. Those that do, do so on a selective basis based on affordability. Many elderly people see a sharp drop in their income after retirement unless they have made substantial pension provisions or have a property portfolio as a back up. Whilst the income drops the bills and expenses of running the house carry on. Your position and goals/aspirations will dictate your options.
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Equity release has seen a boom in the last decade due to the FCA & Equity Release Council rules on transparency and no-negative equity guarantees. The schemes of old when interest rates were high and unscrupulous salesmen are long gone. New schemes are open and transparent so the homeowners can make a decision with the involvement of the children.
Where one is asset rich and cash poor with no other means of raising capital to fund their lifestyle then Equity Release comes into its own. It can provide funds for home improvements and lifestyle expenses to aid a happy retirement without the need to ever make a mortgage payment.
There are no income or credit checks and you will never owe more than the value of your home so you have total peace of mind that you will never leave a debt to your family. You can even build in an inheritance guarantee so your beneficiaries can be left a legacy after your passing.
The amount you can borrow depends on your age, health and the value of your home. The minimum age is 55 and the amounts vary from 25% to 54.5% of the value. The interest is compounded annually and an illustration is provided showing the effect on the loan over the next 15 years or so via a Key Facts document.
As well as a valuable source of funds for your retirement the plan can also be a useful planning tool to reduce Inheritance Tax (IHT). The funds can be gifted to your children and as long as you survive 7 years they gifts will be outside your estate.
This scheme also provides an opportunity for higher level financial planning to ensure you make informed decisions about your future.
Here are a few reasons to choose Chess Mortgages as your mortgage broker for your first time buyer mortgage.
Experienced advisers
We’ve been advising clients on mortgages for over 40 years.
We move fast
No need to wait; we respond & process applications quickly.
Whole of market
We scour UK lenders, private banks & offshore lenders for deals.
What you need to know...
Yes but initial guidance is free of charge. We only charge at the mortgage Offer stage.
You will be responsible for the valuation fee, the lenders arrangement fee, your legal fees etc. If you have not made a Will or arranged Lasting Powers of Attorney we will also arrange these for you for an agreed fee.
You don’t have to but it’s a good idea to discuss matters as a family so the beneficiaries are aware whats happening.
Yes – tell us if this is something you would like to do and this can be built into the product.
If you are both on the mortgage then your spouse/civil partner can carry on living in the property until such time they are taken into long term care or pass away. The lender will sell the house after that which the family is able to purchase. If you are not married then your partner will have to vacate the property voluntarily.
Yes the loan can be repaid but please check the terms of the mortgage offer in case an early redemption penalty applies.
Yes – we can set up a scheme where you can pay monthly for as long as you want to and then stop when you can no longer make the payments giving you total flexibility.
No, our award winning advisers are some of the best in the business with decades of experience. You will be allowed as much time as you need to understand the transaction, its advantages and disadvantages, so you can make an informed decision. The sales process is set up in a way that you control the pace and you can pull out at anytime should you not wish to proceed for any reason, at any stage. Any fees already paid or incurred however will not be refundable.
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