Retirement Mortgage Equity Release Plan
There are a number of different products that can be considered a retirement mortgage, which is essentially a mortgage that has been secured by a property used most often during a homeowner’s retirement years. Most specifically, the mortgage either begins prior to retirement or at some point during retirement. There are options in terms of duration which can be for a fixed period of time at onset such as 10 years or it could be for the remaining lifetime of the homeowner. The mortgage terms of a retirement mortgage require that the homeowner make payments against their loan. Those payments can be capital and/or interest depending on the terms of the product. Homeowners must be prepared to make these payments but there are benefits to having a repayment term. By making repayments against the loan, the homeowner is able to help control the balance of their outstanding loan. Those retirement mortgages that are made on a lifetime mortgage basis will continue until the last homeowner has either passed away or moved into long term care.
There are a variety of options available to homeowners when choosing a retirement mortgage and there are factors that will determine which products are available to the homeowner and which are best, depending on the homeowner’s individual needs and situation. The biggest and most impactful of these factors is income. If borrowing a mortgage while still employed, the current income will need to be verified. If borrowing after entering retirement, the income prior to as well as during retirement will need to be verified.
Once income is verified, the homeowner needs to decide which product is best for their individual needs. In order to make that decision, the homeowner needs to know how much capital is needed. Other factors include the homeowner’s age and the value of the property. One of the best options for choosing the ideal product is to use the help of a specialist who knows the products available. That specialist can give you information on all products currently available in the marketplace and which ones offer precisely what the homeowner needs. The specialist can also review unique features of the different plans.
While there are a number of different unique options when it comes to retirement mortgages, there are several benefits available to the homeowner by using one of these products. Overall, they allow homeowners to enjoy retirement to the fullest by providing funds that may have otherwise been unavailable to the homeowner. Homeowners are able to use a retirement mortgage to fill in gaps in their lifestyle such as general expenditures or retirement adventures, home improvements that need to be made to the property, providing gifts to children who need assistance, purchasing of a new home, or repaying an existing mortgage. With the aid of a retirement mortgage, homeowners are able to enjoy these and other life events that were perhaps impossible to enjoy without the additional funds a retirement mortgage can provide.