Choosing a Lifetime Mortgage Loan
Often referred to as an equity release, this is a mortgage that is going to be based on the equity that is in your property. If you have a free and clear home, these are top candidates for this type of mortgage. It also depends on your age, and the actual value of your property at the time that the mortgage papers are going to go through. You have a couple different options when looking at this. It is possible to borrow one lump sum, or you may have a flexible option where you can pull out a certain amount every month. There are many benefits and drawbacks of this particular type of mortgage. Let’s look at both options to see which one will work best for you.
Benefits Of Lifetime Mortgage
One of the best aspects of this type of a mortgage is that you are still going to own your property. You can spend the money any way that you want to. You will be protected by a guarantee that states you will never have to pay back more than you receive. Another feature involves the inheritance guarantee. Since it is your home, it will be safeguarded against people trying to take it away from people in your family. It’s also possible to make repayments, fully paying off the loan, but there are some drawbacks to consider.
What Are The Drawbacks Of This Type Of Loan?
The main drawbacks include the fact that the total value of the house is going to be diminished which means the inheritance value will be lower. There are also taxes that you have to pay, and if you are receiving any type of welfare, this can also affect how much you are receiving. This commitment that you are making is for the entirety of your life, and interest is going to be added every single month. These are just a few of the drawbacks, but the benefits outweigh the drawbacks, especially if you are trying to find a way to raise money quickly.
You can talk to ukcareguide.co.uk an expert that can provide you with this type of loan. Essentially, it is a mortgage on your house. You are simply not required to pay back the mortgage because of the value of the household. It is recommended that you make payments, or pay off the entire loan in its entirety before you pass on. That way, the full value of the house will be restored, something that you can give to your kids or grandkids later on.