When it comes to getting a mortgage, how old is too old? Clare Malone from Bluefish Financial Services has shared all you need to know about the Equity Release market.
With the changes to mainstream lending bought on by the final mortgage market review in April 2014, it found the majority of lenders not allowing mortgages to continue past the age of 70. This with it’s regulation by the Financial Conduct Authority has seen Equity Release become an alternative lending source for the older generation.
First launched in 1965 and aimed at the over 55’s the Equity Release market has been through it’s up’s and down’s both good and bad, but now regulated by the Financial Conduct Authority it can be used for Purchase, Re-Mortgage, Capital Raising for home improvements, holidays, a source of income or to be invested and much more to the meet the needs of this generation.
There are 3 main types of Equity Release – Interest Only (Lifetime Mortgage), Interest Roll Up and Home Reversion. Each type has its pro’s and con’s to be discussed with your specialist adviser to ensure that your choice is right for you.
Lending is based on the clients age and property type. Affordability is only assessed for interest only/lifetime mortgage lending.
The providers for this type of borrowing has grown over the years, there now being a variety of lenders and products with competitive rates and features.
Equity Release comes with the flexibility to move to a new house, make lump sum payments and completely repay the debt. The Negative Equity Guarantee will mean that you will never owe more than the properties value, giving peace of mind to your loved ones. You can also guarantee your loved one some inheritance with Guaranteed Inheritance Features.
All advisers in this area need to have the specialist qualification – Certificate in Regulated Equity Release.
The Spring is a great time to review all finances and plan for the year ahead and coming years.
Equity release isn’t right for everyone and you should seek specialist financial advice before proceeding.
Taking out a lifetime mortgage will reduce the amount of inheritance you’re able to leave your loved ones, so you might want to discuss this with them. It may also affect your tax position and whether you’ll be able to receive means tested benefits now or in the future.
If you’re interested in learning more about Equity Release and how it can benefit you or family members, please don’t hesitate to contact me.
Clare Malone, Bluefish Financial Services Ltd. 07967 595690
Bluefish Financial Services Ltd is an appointed representative of The Tavistock Partnership Ltd which is authorised and regulated by the Financial Conduct Authority.