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Equity Release

Important Considerations Before Opting for Equity Release or Lifetime Mortgages

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Flexible Lifetime Mortgage Options and Key Considerations

Newer lifetime mortgage products offer more flexibility, such as allowing borrowers to make interest repayments during their lifetime, reducing costs to the estate. Typically, you must be over 55 to qualify, and your life expectancy will influence the lender’s offer. Older applicants often receive better terms. Exploring alternatives like the government’s rent-a-room scheme or downsizing could provide more favourable financial outcomes.

Funds obtained through equity release may affect eligibility for means-tested benefits, so seeking legal advice is essential. Lifetime mortgages and home-reversion plans are not suitable for everyone and require careful consideration. This is a referral service.

Key Warnings and Considerations

A lifetime mortgage is not suitable for everyone and may affect your entitlement to means-tested benefits, so it is important to seek financial advice before taking any action. If you are considering releasing equity from your home, you should explore all available options before deciding on equity release. The interest that may accrue over the long term with a lifetime mortgage may mean it is not the most cost-effective solution. As interest is charged on both the original loan and the accumulated interest, the amount owed can increase significantly over time, reducing the equity in your home and potentially leaving little to no inheritance value.

Although the final decision is yours, you are encouraged to discuss your plans with your family and beneficiaries. A lifetime mortgage could significantly impact potential inheritance. Inviting your family to meetings with your financial adviser can provide an opportunity for them to ask questions and understand the decision-making process. It’s often beneficial to discuss your plans with loved ones before proceeding.

This is a referral service.

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We understand that from time to time our clients may find themselves dealing with circumstances which could mean they are potentially vulnerable. For example, a change in health, caring for a family member or coping with the loss of a loved one. There are many different types of vulnerability, and what makes one person vulnerable might not affect someone else. When we are vulnerable, our need for financial advice may change. However, admitting vulnerability or seeking help can sometimes feel hard.

If this is something you would like to discuss with us, please ask for a copy of our support guide or download a copy here. This guide is designed to help explain vulnerability and the ways in which we might be able to support you. If you feel any of the circumstances in the brochure apply to you, please talk to us.

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