🗣️What People Don't Realise is...

🔊 An individual recently responded to one of my posts saying ‘What people considering this don’t realise is at the end, when they pass, there could be absolutely nothing left to pass onto their relatives.  It will all be gone and owned by these companies preying on homeowners who don’t fully understand what they are signing up to’.

💡My response was to clarify that my role is to fully explain to anybody considering a lifetime mortgage, how they work in plain, easy to understand terms, so that they can make an informed decision as to whether it is the right option for them. 

🌟Let me share a story:

💰I had clients recently; Jeff* aged 74 and Pat* aged 70, they have a property worth £200,000 and want to gift £15,000 each to both of their grandchildren as an early inheritance towards their deposits to buy their own homes.  They also wanted £5,000 to update their bathroom and £5,000 top up their emergency funds, making a total of £40,000.

🤝At my suggestion they included their son and daughter in the meeting we held to go through my recommendation.

🏡I explained that based on the ONS (Office of National Statistics) average life expectancy of a 70-year-old being 18 years:

if Jeff and Pat made NO payments to the plan at all

and the property did NOT increase in value at all over those 18 years

Then there would still be over £94,000 equity in the property as an inheritance at that time.

🏡I also explained that if the interest equivalent to £185pm was paid throughout to the plan then the debt of £40,000 would not increase, which would mean equity of £160,000 in the property as an inheritance at that time if it had NOT increased in value over 18 years.

🏡I explained that with a Lifetime mortgage you continue to own 100% of your property and because the interest rate is fixed for life, they can see from the outset exactly how much they would owe each year and exactly how much it would cost to service the interest if they wanted to.

🤝They were all very happy with this information and understood that they had both flexibility and control of the debt.

🤔What aspect of a Lifetime Mortgage would you like to know more about?

*Names have been changed to protect privacy.

This is a lifetime mortgage. To understand the features and risks ask for a personalised illustration.  Check that this mortgage will meet your needs if you want to move or sell your home, or you want your family to inherit it. If you are in any doubt, seek independent advice.

A fee may be charged for mortgage advice, the exact amount will depend on your circumstances.

Simplified Equity Release is a trading style of The Right Retirement Plan Limited, an appointed representative of The Right Mortgage Limited, which is authorised and regulated by the Financial Conduct Authority