TALKING BUSINESS
EQUITY RELEASE/ LIFETIME MORTGAGES INTEREST ONLY MORTGAGE TIMEBOMB! If you have an interest-only mortgage, you have only been paying the interest on the loan, rather than the debt back. So whatever you borrowed you still owe. There are options you can consider: Extend your mortgage Depending on how long is left on your mortgage, your lender may consider extending the term. The lender is likely to consider this if extending the term will still result in the mortgage being repaid. This will give you more time to consider the options, but there will still be an End date where the mortgage will need to be repaid.
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Remortgage If you have enough time left on your loan, the bank may let you remortgage onto a repayment loan. This would mean switching directly to a repayment mortgage.
Downsize Selling your home may release enough to pay off your mortgage. It will mean buying a smaller property or keeping the cash balance after your sale and renting. (Please see Equity Release Purchase below) Talk to your bank Lenders have been training staff in how to deal with borrowers in these situations. They have been told to give borrowers time to consider their options and assess if any variation to an existing mortgage with significant increases in monthly repayments could help the situation. Savings If you have any savings, or expecting a maturity of a savings policy, Tax Free lump sum for your pension, then these could be used to repay your mortgage. Cash in your endowments Many borrowers took out an endowment policy in the 1980s and 1990s to cover
repayments on the mortgage. However, many of these investments may have underperformed. There is an argument for taking the cash from your endowment now to have access to some funds to pay off part of the mortgage. Get your children to pay By paying off the interest as you go, you can dramatically reduce the total cost of the debt. In effect, you are simply converting a standard interestonly mortgage into an interest-only mortgage for life. One potential way of making this work is to get children or other family members to contribute the interest costs of the loan. This is especially helpful where the children are the beneficiaries of the will and as they will ultimately benefit from a property that only has the original mortgage amount that has not increased by the roll up of compound interest.
Bob Ducker
Equity release Many homeowners want to remain in their home. It is where you have raised families, know your neighbours and are the most comfortable. You have a lot of memories and emotions in your property. One way of staying in your home is through equity release. This allows you to release equity in your home to pay off debts and stay in it at the same time. There are many options and type of Equity Release, Lifetime Mortgages and Home Reversion schemes, your adviser will explain all the different types and their features benefits and disadvantages. With NO obligation at a FREE consultation, all fees and charges would be explained to you at that consultation, (e.g; Valuation, Arrangement, Broker, Legal fees (and if a purchase Stamp duty).