Income Lifetime Mortgages

[vc_row][vc_column][vc_column_text]Within previous articles – we have discussed Equity Release Mortgages whereby a lump sum is paid. There is now a new type of mortgage for the over 55s who are seeking an income rather than a lump sum.[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column width=”1/2″][vc_column_text]What’s an Income Lifetime Mortgage?

We all want to make the most of our time during retirement, but whether you enjoy dining out with friends, or keeping fit or even treating the grandkids, lifes little luxuries can add up. Your home could provide an extra source of income to help you maintain your standard of living and do more of the things that you love.[/vc_column_text][/vc_column][vc_column width=”1/2″][vc_single_image image=”1638″ img_size=”full” add_caption=”yes”][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]An Income Lifetime Mortgage is a new way to release equity. It’s a loan secured against your home that allows you to release, regular monthly income for 10, 15, 20 or 25 years. There is no need to make monthly payments as you won’t have to move.

The interest rate, the amount that you will receive and the length of time that you will receive it for are fixed from the start and cannot change, meaning that you will know exactly what you are getting each month. Of course, income can be stopped at any time with no fee (though once stopped it cannot be restarted).

Another important note is that the no negative equity guarantee means that you or your estate will never owe more than the amount that the property is sold for (subject to terms and conditions).

What if I already have other retirement products?

Even if you are already in receipt of your State Pension, an Annuity, or your using Pension Drawdown, this product can work alongside them to provide you with additional monthly income in retirement. If you are looking to retire a little earlier or breach an income gap while you are still working part-time, this product is designed to help here too.

Am I eligible?

A Lifetime Mortgage is a loan secured against your home and is for those who:

  • Are aged 55+
  • Live in and own their own home with a small mortgage/no mortgage
  • Want to top up income by £200 or more a month
  • Want a minimum initial loan of £2,500 at the outset
  • Own a house worth £100,000+
  • Live in England, Wales or mainland Scotland

Important Information

  • The loan is only repaid when the last surviving borrower dies or moves out and into long term care
  • Inflation may reduce the spending power of your money over time
  • At the end of the income term, the income will stop, and interest will continue to roll up until the loan is repaid
  • Interest is added to the amount that you owe each month. The amount owed will increase quickly over time, reducing the equity left in the house and any potential inheritance that you may have
  • May affect means–tested benefits and the size of your estate. You may have cheaper ways to borrow
  • Arrangement fee applies

So, if you are looking to unlock extra monthly income, please do get in touch for further information. We are an award winning firm of Chartered Independent Financial Advisers.[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]By Ivan Lyons, Director, Investment Solutions, Worthing

Contact Investment Solutions: Grafton House, 26 Grafton Road, Worthing, BN11 1QT. 01903 214640 or send an email to Ivan at: [email protected] or visit www.investment-solutions.co.uk
Twitter:  @investment_sols[/vc_column_text][/vc_column][/vc_row]

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