Lifetime mortgages can help many people and one of the many ways that they are beneficial is how they give you a lump sum of cash. If you are over the age of 55, lifetime mortgages are potentially available for you. There are several types of lifetime mortgages such as interest only, drawdown and the general lump sum schemes.
Drawdown lifetime mortgage schemes are a good option for people who want to release cash from their home, especially if nearing the end of their existing mortgage agreement. It is essentially a drip fed mortgage which means that you do not have to take all of the cash offered to you at the beginning. Instead you can take a small amount initially and then withdraw the remaining reserve facility as and when you require it.
It is important to seek independent equity release advice about drawdown mortgages to see if they are right for you. For example, unexpected emergencies could change your needs and you might find that a drawdown mortgage could work because you can use from the pool of cash that you got for the first instalment.
Another popular type of mortgage that helps people beat the taxman are the lump sum mortgages. These are fantastic especially if you want to do any extra DIY or renovations on your home, the lump sum mortgage that you can apply for gives you the scope to get your hands on the cash you need to do so. Projects can vary far& wide from simple kitchen improvements to full blown extensions & conservatories, in many cases changing people's lives.
One important aspect to remember about lifetime mortgages is the fact that they are not on a fixed term. Interest is added onto your loan monthly or annually and this is something you need to be aware about. This is especially if you are taking out a mortgage as a couple, because you both need to know the ins and outs of the finances required for a lifetime mortgage if ither of you died.
Top tip: Look into your lifetime mortgage contract to check there is a negative equity built into your contract. It is important to know that you have the right to be protected against negative equity if your lifetime mortgage loan is bigger than the actual value of your property. This is to ensure consumers are protected at all times when taking on a financial risk such as taking on a mortgage. Any company who is a member of SHIP (Safe Home Income Plans) must have this included.