Over the past few years there has been an increasing amount of media coverage, and media advertising, focused on Equity Release and Lifetime Mortgage products. You’ve no doubt seen the television marketing that has started to pop up during day-time ad breaks. Equity Release schemes allow home owners to free up a large chunk of any profit tied up in their properties, with compound interest being applied for an agreed period – which is repaid when the property is sold due to care requirements or at the end of life.
There has been a lot of negative publicity about Equity Release as, historically, higher than acceptable interest rates and restrictions were included in constrictive contracts, and there are many horror stories where, rather than allowing home owners to enjoy their later life using a windfall from their own homes, they face mountainous redemption costs and a reality where leaving inheritance to their own family has been removed.
Thankfully, those darker days are behind us, and myriad products have emerged that cater for every situation – rebranded Lifetime Mortgages – interest rates are not only comparable to the lowest mortgage rates currently available on the market, but the low rate is fixed for the lifetime of the agreement, therefore removing the risk of sprialing borrowing. Most products also allow over 55-year-old home owners to pay the interest on their advances each month, meaning the size of any loan does not increase.
These products are proving very popular with our clients, many of whom have significant equity tied up in their homes, but are at the stage of life where they would either like to help a family member onto the property ladder, or to boost their pension pot income for well earned travelling or home improvements. Here at The Financial Planning Group, we are able to sit down with each client on an individual basis and agree on a strategy that is right for their exact circumstances.
We are also in the process of planning a free to attend seminar, where you will be invited to come along and hear expert advice and ask questions regarding whether these Lifetime Mortgage products are right for you.
We will be announcing the date of the seminar in the coming weeks, but in the meantime, if you are interested in attending, or wish to discuss any of the equity release products mentioned in this e-mail, please contact Steve Padgham via Steve.Padgham@fpgonline.co.uk or call him on 020 8614 4782.