Retirement Mortgages London, Middlesex, UK Surrounding Areas
RETIREMENT MORTGAGES UK
With the cancellation of any maximum retirement age, and the recent relaxation in FCA (Financial Conduct Authority) rules on lending in retirement, some mortgage providers have started providing retirement contracts.
SO WHAT ARE RETIREMENT MORTGAGES?
Retirement Mortgages Nationwide are ordinary mortgages that are aimed at homeowners aged 55+, who either wish to continue with an existing home loan, move house, or just want to release money from their existing home and are willing to maintain monthly repayments.
Such retirement mortgages Nationwide also offer borrowers the choice of either opting to pay monthly repayments towards both the capital and interest or just the interest.
Although a few of these retirement mortgages interest rates will anticipate that you should reimburse the debt by a specific age, for example, 85, several offer interest only mortgages for life, usually described as Retirement Interest Only Mortgages or RIO’s.
These true retirement mortgages rates nationwide offer an alternative to the more established interest only equity release property mortgages and might be a better option for some. However, there are certain key differences.
SO HOW DO RETIREMENT MORTGAGES DIFFER FROM INTEREST ONLY EQUITY RELEASE LIFETIME MORTGAGES?
There is a huge difference between these two. We’ve narrowed down the advantages and disadvantages below.
RETIREMENT MORTGAGES UK
These are offered by many lenders. These mortgages are offered on two bases; a fixed term (where you have to repay the mortgage by an agreed age between 80 or 85) or interest only for a lifetime mortgages.
- If a reimbursement strategy is chosen, your debt will decrease. Also, you will be able to leave more equity than you would in the case of equity release schemes.
- You can expect lower interest rates, and they are fixed. These can be available for as long as 5 years.
- Early Repayment Charges will be shorter than those accessible under an equity release scheme.
- On the basis of incomes and property estimations, at a younger age, you may be able to borrow more than you could under an equity release scheme.
- Under this scheme, your salary, affordability and credit score/rating defines your eligibility.
- For all fixed-term mortgages, you have to pay the end of the term.
- Should you stop making repayment, you will be risking your home.
- Under this scheme, all applications are for one single borrowing amount. No extra facility to draw down effectively (not at all like with drawdown lifetime equity release plans).
- Candidates with a poor credit rating or no private or occupational pension are likely to not be considered for a retirement mortgage.
- Fixed rates are offered for a fixed period (ordinarily 5 years or less) – this can lead to vulnerabilities for future planning.
- Providers may restrict the sum they will loan for specific purposes, for example, debt consolidation.
- In joint applications, income and maximum borrowing will be based on the least pay.
Retirement Mortgages UK, London, Middlesex
Whether you are reaching retirement or already retired, you know how difficult it is to borrow with the standard residential mortgage. Some lenders show poor approach towards old borrowers when it comes to mortgages. Many limits their borrowing criteria to a maximum age of 80, meaning the closer you get to that age, the more difficult it can be to avail a mortgage retirement age UK. Nevertheless, Equity Release 4 You has a solution to your every financial problem. With good market research carried out by our qualified advisers, we can help you release equity from your home by using retirement mortgages rates.
What is Best Retirement Mortgage UK?
A retirement mortgage is a type of lifetime mortgage that allows you to withdraw a lump sum of cash against the value of your property. The only key difference is you need to pay monthly interest until you reach a certain age. Thereafter, you can either choose to pay interest monthly or it will be added to the loan amount that needs to be repaid after you die or move into permanent care. Mortgage retirement age UK are basically divided into two categories: a fixed term mortgage, which is required to be repaid when you reach certain age, and lifetime, which is required to be repaid after you pass away. However, the most popular choice is retirement interest only mortgages nationwide.
How Does Retirement Mortgage Works?
Mortgages for retirement usually commences either when your retirement approaches or while you retire. When you take out mortgages into retirement, you are required to make monthly repayments of the interest based on the amount you borrow and the mortgage terms. Nationwide retirement mortgage rates UK being classified under the lifetime mortgage will last until the borrower passes away or shift to the long-term care.
What is Retirement Interest only Mortgages Nationwide?
If you are approaching retirement, and still have an ongoing mortgage and you are not sure how you will pay off, retirement interest only mortgage is a great solution. It is a good way to clear your current debts without requiring to downsize. With retirement interest only mortgage, you can remortgage your current loan under similar conditions. You only need to pay the interest. The loan amount is usually paid back when you die or go into a long-term care and your residence is sold.
Retirement interest only mortgage is a pretty similar to standard mortgage with two major differences –
- The loan amount needs to be repaid when you die or sell your house.
- You are required to pay interest monthly, hence you need to provide assurance that you can afford.
There are no age requirements when it comes to the retirement mortgage interest rates plan, but it is generally suitable for older adults who are aged over 55 or 60. Unlike lifetime mortgage where you have to pay a larger amount at the end of your plan because of the accrued interest added to the loan amount, retirement interest only mortgage only asks you to pay the loan amount since you pay interest every month.
How Does Repayment in Retirement Interestonly Mortgage Works?
The retirement mortgages interest only is paid in two parts: the outstanding loan value and the interest. During the mortgage term, you are only supposed to pay the monthly interest amount based on the money you borrow. The total outstanding loan amount needs to be repaid when your home is sold after you pass away or move to long-term care.
What are the Advantages of Retirement Mortgages Interest only?
- You get more financial options as you get older.
- The affordability assessment is made only on the basis of repaying the interest.
- The payable amount at the end of the mortgage is much lesser since you are paying interest monthly.
- The mortgage term is not fixed.
- It is way cheaper than other lifetime mortgages.
- You don’t have to downsize to a smaller property.
- Leave more inheritance for your descendents.
- You can unlock a substantial equity from your home to pay off your debts.
Is Retirement Interest only Mortgage Different from Equity Release?
A retirement interest only mortgage may look similar to equity release, but it differs on how it works. In retirement mortgages interest rates to you make monthly interest repayments, while on the other hand, equity release gives you a lump sum of money and the interest rolls up, and it is paid back when you die. The final payable amount at the end of the equity release plan can be much greater since both interest and loan amount are being accrued. It also impacts the amount of inheritance you want to leave for your family.
How Much Can You Borrow With Retirement Interest only Mortgage?
The amount you can borrow with interest only retirement mortgage nationwide differs from lenders to lenders. However, Equity Release 4 You allows you to take out a retirement mortgage with great ease. Our lending criteria, such as minimum and maximum residence value, your age, your income and expenses is extremely flexible. We advise you to use our retirement mortgage equity release calculator or talk to one of our mortgage experts in order to get an idea about how much you can borrow.
When Should You Choose Retirement Mortgages?
Financial needs can arise any time after the retirement, and if you aren’t prepared for it, you could be in a serious trouble. Whether you want money for home improvement or help your children in their financial crises, retirement mortgages are an ideal solution. Retirement mortgages are one of the best ways to raise funds if you find yourself in any of these following situations.
- Your home is heavily damaged and home improvements are unavoidable.
- You want to help your children pay a deposit onto the property ladder.
- You want to pay for your ongoing mortgage that is due.
- You are planning to buy another property and live nearer to your children.
- You want to travel, buy a new car or enjoy luxuries that you were craving for a long time.
If you are planning to take retirement mortgage, we suggest that you speak with our mortgage specialists who will explain all the features, risks and benefits associated with it. They will provide tailored, no-obligation quotation based on your circumstances.
Please contact us today to find out more.