If you are aged 55 or older and have owned a property for several years, there’s a good chance that much of your wealth may be tied up in your home. And with average house prices increasing by around a third over the last 5 years, the equity has increased dramatically.
Many High Street lenders used to shy away from later life lending, but now the industry has become more trusted along with the realisation that this market is so large, they had to get involved. The growth in lenders has led to more innovative products being available for all types of individual circumstances.
There are a variety of reasons for borrowing in later life. One common reason is to pay off an existing mortgage which has an expiry date due to the maximum age it can run to. It could be to pay off other debts helping you keep more of your monthly disposable income, or boost your own income where you are equity rich but cash poor. It could be to pay for home improvements, garden improvements, buy a new car, plan some holidays, anything to make your retirement more comfortable. May be to help family members financially, such as getting on the property ladder themselves. It yis also a good tool to use as part of your inheritance tax planning. The reasons for this type of lending are endless and can improve your financial circumstances. On all these options though, it is important to seek financial advice from a qualified adviser.
Everyone’s personal circumstances are different and later life lending is not suitable for everyone, but for many it can transform their or their loved ones lives. Whilst I often hear negative comments about later life lending, this is all a legacy of arrangements made many years ago, although the effects are still being felt today. For anyone with a legacy arrangement I would encourage they seek advice as to whether this can be moved to a more cost-effective product.
Please note – receiving a later life lending product may affect your ability to claim any state benefits that are means tested. Legal advice should be taken on any later life lending products.
With so many lenders and products now in the market, coupled with low interest rates, later life lending products are worth considering as part of your Financial Planning, especially if you want to enjoy your retirement. Later life lending is regulated by the FCA (Financial Conduct Authority).
Here at Blake and Day, we are registered for all types of mortgages and additional borrowing. Please do not hesitate to contact us with any queries you may have and we will be more than happy to help you.
Mark Reynolds
07876 688996
BD Financial Planning, BD Mortgages and BD Equity Release
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