How An Interest Only Lifetime Mortgage Provides a Safety Net For Retirees
When you are reaching retirement you may start to worry that your mortgage has not been paid off yet. This becomes increasingly stressful as you enter retirement as lenders are now demanding to be repaid quickly and most often before reaching 70 years of age. As you are retired you may not have the capital amount they require for one reason or another.
Legacies surround this issue as interest only mortgages were prevalent in the 1980’s-1990’s whereby low cost endowment policies were used as their repayment vehicle. The debacle that followed has left the ruination of many whereby poor performance or early encashment of policies has left a financial black hole that many have never filled.
However, an equity release scheme could mark the way forward. An equity release remortgage can change your mortgage into an interest only lifetime mortgage. This means that you can release money and have the rest of your life to pay your mortgage and more importantly the lenders will receive all their money once you die or enter care. When this happens your house is sold and the lender is paid, so that it doesn’t fall to your dependents to pay. You can visit informative websites such as http://www.interestonlylifetimemortgage.co.uk where more ideas are available on this popular topical issue.
If you enter retirement with a mortgage, then you can re-mortgage as an interest only lifetime mortgage. This set up is offered by providers like Stonehaven and more2life and allows the interest to be paid each month for the retiree’s lifetime. This allows the mortgage value to remain the same as the interest is being paid off each month. Knowing this balance at the end of the term is important if you wish to protect an inheritance. This is because this balance is paid once the property is sold and the remaining value can then be set as an inheritance.
By changing your mortgage into an interest only lifetime mortgage, you will feel less pressure going into retirement with your entire mortgage paid off and the lender off your back. Also the interest only lifetime mortgage does not allow the interest to be roll-up, so there will be no extra surprises for your beneficiaries when the final amount needs to be paid back to the lender.
This allows a retiree to feel more secure with the mortgage and will feel less stress as they get older with the interest only lifetime mortgage. It is now not unpopular for a mortgage to be carried into retirement and this has depended on various factors like spending habits and lifestyles. The interest only lifetime mortgage then adds that security. With a fixed interest rate for life, the applicant is safe in the knowledge that monthly repayments will never change. With pension incomes rising each year this should help affordability of such a mortgage concept.
There are other equity release schemes that could be used to pay off any mortgage and all of them should be looked into, so that you are able to decide which one is the best for you. Consult an interest only lifetime mortgage adviser such as Equity Release Supermarket on 0800 678 5159 whose independence gives them whole of market status & access to ALL equity release schemes around.