1. I will no longer own my own home
Taking out a lifetime mortgage does not affect the ownership of your home. You are not selling part of your home, you are just borrowing against your property with no fixed end date. The mortgage lasts for as long as you need so it can be a great later life lending solution when other options are often not available.
2. I might end up owing more than my house is worth
Plans approved by the Equity Release Council come with a ‘No Negative Equity Guarantee’ as standard. This ensures that you will never owe more than the value of your property.
When the plan comes to an end, when you die or move into long-term care, the home is sold and any remaining funds will be left as an inheritance. In the unlikely event that the property sells for less than the amount of the loan, the remaining balance will be written off.
3. I can’t take out a lifetime mortgage because I have an outstanding mortgage
This is not true. Releasing equity to clear an existing mortgage has become one of the most popular uses of a lifetime mortgage. When you release equity from your home, the tax-free cash you release is first used to clear any existing debt secured against the property.
Many are now looking to a lifetime mortgage as a solution to the interest-only mortgage crisis.
4. I can’t move house if I have taken out a lifetime mortgage
With plans approved by the Equity Release Council, you have the guarantee that you can move house in the future if you need or want to. There are plans available with downsizing protection which allow the plan to move with you.
5. I won’t be able to leave an inheritance for my family
For many people, leaving an inheritance for your loved ones is important. Therefore, providers have developed plans which allow you to protect a percentage of your homes’ future value.
It is becoming increasingly popular for people to unlock the cash to provide their family with an early inheritance. Some give the gift of an early inheritance to give grandchildren a lift onto the property ladder or help with university fees.
Not only does this allow them to help their family when they need it, but it also means they get to enjoy seeing it.