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LATER LIFE 9
So what next ?
One option could be an interest serviced lifetime mortgage .
Increasing consumer demand has led to much innovation in the lifetime mortgage market over recent years . There are now several lifetime mortgage lenders who offer borrowers the opportunity to service the interest .
As at Autumn 2022 , 24 % of equity release products had an interest serviced option .
They ’ re designed to help those who are used to making monthly repayments and who wish to continue to pay at least some of the accrued interest each month . However , due to strict affordability requirements , they wouldn ’ t qualify for a residential mortgage .
Unlike an interest-only mortgage , there ’ s no risk of repossession . If borrowers stop making their monthly payments , the interest is instead added to the amount they owe each month on a ‘ rollup ’ basis and repaid when they ( or last surviving customer if borrowing jointly ) pass away or go into permanent long-term care .
And with most lifetime mortgages , the interest rate is fixed for the life of the mortgage . There ’ s also a no negative equity guarantee , which means when the property is sold following death or entering long-term care , even if the amount left is not enough to repay the outstanding loan , neither the borrower nor their estate will be liable to pay any more .
With our Just For You Lifetime Mortgage , borrowers can choose to pay between £ 25 and 100 % of the monthly interest for the duration of the lifetime mortgage .
They can borrow either a one-off maximum lump sum , or release a smaller sum initially , with the option of releasing further sums up to the amount of a pre-agreed cash facility at a later date when needed . They ’ re able to make monthly interest payments on any further sums they choose to release .
Additional features include the option for borrowers to take a payment holiday of up to three consecutive months in any 12 month period . This feature is designed to allow them the added flexibility needed should they have a short term need for additional cash .
Outside the payment holiday , should the borrower miss six monthly payments , the mortgage will automatically convert to interest ‘ roll up ’. Clients choosing to pay 25.01 % or more of the monthly interest amount can benefit from a reduction to the roll-up interest rate and reduce the effects of compound interest .
FOR MORE INFORMATION
Call : 0345 302 2287
Lines are open Monday to Friday , 8.30am to 5.30pm
Email : support @ wearejust . co . uk
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