For most retirees, property is often their biggest asset and as a result of poor pension provision and an increase in housing prices, more and more of our elderly population are becoming asset rich and cash poor.

Equity release gives people aged 55 and over, who have money tied up in their home the ability to release equity from the property without having to sell it or make monthly repayments. The homeowner can decide to take a lump sum or draw down smaller regular amounts (or a combination of both) from the value of their house, whilst still residing in it. For many this can also be an option to repay an interest-only mortgage.

AdviserFinance is a member of the Equity Release Council and has a team of qualified experts in this area.

There are many reasons why a lifetime mortgage may be required, here are just a few:

• Consolidate debts – relieving the pressure of monthly commitments
• Financial help for family members – helping them get on the housing ladder or helping them through education
• Improve lifestyle – providing the finance for a new car, renovating the home, holiday, or care in the home
• Getting the most out of retirement and providing additional income
• Health requirements not covered by NHS
• Repayment of interest only mortgage

Why choose it?

AdviserFinance offers a range of lifetime mortgage solutions to meet your clients needs. Whether it be a plan where the interest can be serviced, raising funds on an investment property or a clear “exit plan” we will walk your client through the products and process step by step to ensure the chosen product is the most suitable for them. The niche products can include the following features:

• You can protect some of the value of the property as inheritance for family
• Many offer the option to make repayments or at least service the interest
• Most allow the interest to roll up if required (loan amount and any accrued interest is repaid upon death or moving into long term care)
• Right to remain in the property until death or moving into long term care
• Only pay interest on amount withdrawn
• No Negative Equity Guarantee (Client or their estate will not be liable for any negative balance on the loan once the property is sold)
• Some lenders offer the right to move to another property

* (t&c’s apply to all of the above)

Criteria

There is a lot of strict criteria involved in the process of a Lifetime Mortgage, but here are a few of the key points:

• Available to individuals aged 55 and over
• Borrow between 20% and 50% of the value of your property dependant on age
• Enhanced rates available for applicants with certain health conditions
• Interest rates are fixed or capped variable
• No fixed term
• An attorney can act on behalf of an applicant if the homeowners have lost mental capacity providing they have the required permissions and are acting on the best wishes of the applicants
• Early repayment charges can be fixed or gilt linked
• Downsizing protection

Is equity release the right option for your client?

As much as a lifetime mortgage can be the perfect solution for many, there are a few alternatives to consider first and some key questions to be asked in determining whether the product is the right option for them, these include the following:

• Would your client consider taking in a lodger?
• Would downsizing be an option for your client?
• Are your clients eligible for any state benefits or local authority grants?
• Can your clients use investments or savings?
• Do your clients have a family member that could help?