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Frequently Asked Questions
Do I need professional advice?
Yes. You can only get a lifetime mortgage through a specialist regulated lifetime mortgage adviser. Your adviser will check that you are eligible and help you review your options. Independent financial advisers can give advice on all lifetime mortgages available in the market.
Will a lifetime mortgage affect any inheritance?
Yes. You can access the equity now to use as you wish – this means that the value of any inheritance you leave after your death will be reduced. Most lifetime mortgages offer an option that you can choose at the outset to protect a percentage of the value of your home to your beneficiaries. If you take the inheritance protection option it will reduce the amount you can borrow.
Will I have to make monthly payments?
No. You do not have to make any monthly payments. The loan and interest only has to be repaid when you die or you move into long-term care. With most lifetime mortgages you can make optional partial repayments subject to certain criteria being met. Please see ‘Can I repay my lifetime mortgage early?’ for further information.
What fees will I have to pay?
Initial costs vary. For more information please ask your adviser for the latest lender charges. In addition, you may have to pay your adviser an advice fee and also your solicitor a fee to go through the legal aspects. Your adviser will discuss this with you.
Will my state benefits be affected?
Your entitlement to state benefits could be affected. Your adviser can help you understand how any benefits you are receiving may be affected. You should also be made aware of any state benefit entitlement that you may be eligible for and are not currently claiming, and advised how to claim.
Will a lifetime mortgage affect my tax position?
The money you receive will be paid free of tax. Depending on what you do with the money, and your individual circumstances, tax may become payable. Please ask your adviser if you have any questions.
Will I pay interest?
Yes. Interest is charged on the total loan amount plus any interest already charged. It means that the total owed grows quickly, reducing the equity left in your home and the value of any inheritance.
You or your beneficiaries only need to repay the money when you die or go into long-term care.
Will I still own my own home?
Yes. With all lifetime mortgages, the property stays in your name and the loan is secured against your home. A lifetime mortgage is designed to be repaid when the last property owner dies or moves into long-term care.
In the future could I be made to leave my home?
With all lifetime mortgages, you stay in your home until you die or you move into long-term care, as long as you comply with the terms and conditions which your adviser will explain to you. Failure to comply with these could result in the forced sale of your property and the loss of the right to inheritance protection if this has been chosen.
Can I repay my lifetime mortgage early?
The loan and interest is paid off when you die or go into long-term care. However, with some lifetime mortgages, you can make optional payments if certain criteria are met. If you decide that you want to repay any of the loan early or outside the terms of any overpayment facility you may need to pay an early repayment charge, which could be substantial.
Some lenders do not charge an early repayment charge in some circumstances such as downsizing, or only for the first 10 years of the loan.
If you think you may be in a position to repay a sum larger than a lender would normally allow, this should be discussed at the outset with your adviser.
How long does it take to get the money?
It usually takes about four to six weeks from the time you complete your application with your adviser to the time you receive your money. Your adviser will keep you updated during this time.
What is the no negative equity guarantee?
All lifetime mortgages come with a no negative equity guarantee. This applies when your property is sold after your death or if you move into long-term care. It means that even if your home goes down in value, you’ll never have to pay back more than the amount your property is sold for. This is provided it is sold for the best price reasonably obtainable (subject to terms and conditions).
All advisers at MCAL Equity Release are regulated lifetime mortgage advisers