Later Life Lending

Over the past decade, the later life lending market has undergone significant changes, providing borrowers with many options. As a result, the market has become more heavily regulated to ensure greater protection to borrowers.

 

Solve Mortgages can provide whole-of-market advice on mortgages and lifetime products to help find the right solution for your needs.

 

7 Popular Reason For Release Equity

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The substantial increase in property prices over recent decades has resulted in many individuals accumulating wealth through their homes. However, the traditional methods to access this wealth involve either selling the current home to move into a smaller one or staying put and taking out a loan against the home's equity. 

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Equity Release is a financial option that permits homeowners aged 55 and over to unlock a lump sum from their property's value. This can be done without the need to extend their working years, sell their home, downsize, or relinquish ownership, thus enabling a more enjoyable retirement. Here are the seven most popular reasons individuals opt for equity release:

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1. Home and Garden Improvements

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One of the primary motivations for homeowners to release equity from their property is to fund home and garden improvements. Recent research by lenders reveals that 30% of equity release borrowers cite enhancements to their property or garden as their reason for accessing equity. Such improvements not only increase the property's value but also significantly enhance the quality of life.

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2. New Home

It often comes as a surprise that equity release can be used to buy a new home. This could be a second property, but it's not a requirement.

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3. To settle an existing mortgage and debts

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Borrowing money to pay off another loan might seem counterintuitive, but it's a common reason for equity release. Recent studies show that one in five individuals planning to retire this year will have an average debt of £33,900. The research indicates that 19% of retirees will be in debt.

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A Lifetime Mortgage differs from a standard mortgage in that the loan is only repaid upon death or when moving into long-term care, eliminating monthly repayments.

 

Various options exist for interest payments, and you can choose to receive a single lump sum or access additional funds later.

 

A professional equity release adviser can clarify these options for you. Additionally, Lifetime Mortgages  come with a 'no negative equity guarantee,' ensuring you never owe more than your home's value.

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4. Increasing Disposable Income

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Increasing disposable income is crucial as many face the prospect of a cash-strapped retirement. Fortunately, homeowners who have seen their property values rise can consider equity release as a viable option. This approach can offer a tax-free lump sum to supplement retirement income over the long term. Alternatively, a drawdown facility allows for the withdrawal of funds as needed.

 

Consulting with an equity release adviser can provide clarity on the various available options.

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5. Assisting Family Members Financially

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It is commonly inquired whether it's feasible to bequeath an inheritance to loved ones after releasing equity from a home. Indeed, it is possible, and there are methods to secure a specific sum. Some individuals opt to "gift" a sum of money presently instead of waiting until their passing.

 

They might unlock funds from their property to aid their children or grandchildren with significant expenses, such as purchasing their first home or covering university tuition.

 

It's important to note that Inheritance Tax Planning is not governed by the Financial Conduct Authority.

 

As equity release advisor we can direct you to expert consultants for assistance with taxation and estate planning.

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6. Holidays

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Many of us harbour dreams of globetrotting upon retirement, checking off bucket list destinations, and reconnecting with distant friends and family. It's common for individuals to utilise released funds to transform these aspirations into tangible experiences. Releasing equity from your home provides the financial freedom to pursue any desired endeavour.

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7. New Car

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For many clients, purchasing a new car is a top priority with the funds obtained from equity release. A modern and dependable vehicle represents a significant investment, often unattainable for retirees. Through equity release, we have enabled some of our clients to turn the dream of owning their ideal car into a reality.

 

How Solve Mortgages Can Help You

 

Solve Mortgages are dual registered. Therefore, we can advise you on all mortgages and lifetime products. We provide whole of the market advice across both sectors. Meaning we do not have to introduce you to a third party to find the right solution for your circumstances.

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Need advice, book a free consultation below.