As you get older, lenders see you as being more risky. The reason why is obvious — you’re not as young as you used to be. If you pass away, there is a real risk that they’re not going to be able to get their money. So many older couples are having a problem — just how do they get the money that they really need for the home of their dreams?
Believe it or not, the answer is fast becoming an equity release scheme. Instead of trying to go with a heavy mortgage during the golden years of your life, you get to have a low monthly payment mortgage. It’s just for the interest on the loan. So you could have a payment of two hundred pounds a month or even less than that depending on how much the money is. If you already own a home, this makes a lot of sense.
You can use this as a way to make up for a shortfall between one property and another property. With an equity release plan, the debt isn’t going to go up — you’ll be stuck with the same principal over and over again. So all you really have to do is make sure that you’re paying off the money with the sale of your home. The truth is that equity release is designed to make your life comfortable until your passing. Then your heirs — if any — can just sell the home and pay back the equity release company.
More and more lenders are forcing the over 60 crowd into this option, but it could actually be a great plan for people really trying to get into another home without being stuck with the same big time mortgage. If you’ve already paid your dues and are ready to step into a more comfortable life, this scheme is definitely for you.
Keep in mind that like any mortgage, there are terms and conditions that will apply. In addition, there will be some fees that you need to pay attention to. There are some great benefits but you still need to keep your mind right in terms of what’s going on around you. The more that you can plan, the better off you will honestly be.
Now is the perfect time to make sure that you’ve covered all of your bases when it comes to getting into another home. The housing market is beginning to pick up, so now is the perfect time to really look into another home. Good luck!