About the Later Life Lending team
The Mortgage Mum Later Life Lending team has been set up to bring our core values and a Mortgage Mum touch to another sector within the mortgage and financial industry. As an all-woman brokerage we pride ourselves on adding that extra care and compassion sometimes lacking within this sector.
In a short space of time The Mortgage Mum has taken the mortgage industry by storm, winning multiple awards and breaking the mould, and we want to do the same with our Later Life lending division.
Our aim is to break down some of the existing barriers and educate people on the benefits of Later Life Lending and Equity Release, which still has the stigma and lack of knowledge, from before the industry became regulated by the FCA in 2012.
Our team will take time to discuss in depth any advantages or potential disadvantages, and what benefits of releasing equity can bring to homeowners or their family.
We will sit down over a cuppa and a biscuit, albeit face to face or virtually, and fully get to know you, our customers, and your needs, discuss what is available and how we can help improve lives by releasing equity tied up in homes across the country. Our job is to hold your hand, advise and educate you every step of the way, liaising with family members where possible to offer transparency and reassurance.
What is Equity Release?
Equity Release allows homeowners aged 55 and over to release equity built up in their property as a tax-free lump sum, which can be either their home where they live, or another property they own, for example a Buy to Let property or Holiday Home, to spend as they wish.
Depending on the type of Equity Release product best suited to your circumstances, you can choose to take the money as one lump sum or over a series of smaller amounts, and there are many factors which you would need to consider carefully to decide on how much money you are going to draw down at any one time.
The benefit of releasing money from your property with Equity Release, is the money does not need to be repaid until you move out of the property into permanent care or die.
Types of Equity Release Products
Lifetime Mortgage – for over 55s
A Lifetime Mortgage is a Plan that allows you to free up some of the wealth in your home and still be able to live there. The amount you can free up depends on factors such as your age and the value of your home. An advantage of a Lifetime Mortgage is you can decide if you would like to pay the interest as you go on a monthly basis, to avoid compound interest, or you can choose to make partial payments, or not make any interest payments and allow the interest to roll up. In all cases the loan and any interest accrued will be payable when the property is sold. A disadvantage with this is the earlier you take the Lifetime Mortgage out, the less the lender will offer you and if you allow the interest to roll up, this can impact the amount of equity left in the property for your beneficiaries.
Home Reversion Plan* – for over 60s
A Reversion Plan is where you sell between 25% – 100% of your home to a lender in exchange for an agreed lump sum, or you have the option to take a regular income for life. Advantages of a home reversion plan are that you may be able to release more equity from your property than with a Lifetime Mortgage and you can benefit from increases in the property value from the unsold share. But a disadvantage is you will not benefit from the rise in equity from the portion of the house you have sold. A major concern for many is the loss of legal ownership of a percentage or all of the property.
*We do not advise on this, but we are happy to recommend you to a third party Home Reversion specialist if you think this is an option you want to consider
Alternatives to Equity Release
It is possible to take out a mortgage even if you have retired using the income from your pension, benefits and investments. There are specific mortgages called Retirement Interest Only (RIO) which should be considered as an option before committing to an Equity Release product.
Retirement Interest Only Mortgages (RIO) – NOT considered equity release products
This can be a possible alternative. A Retirement Interest Only mortgage is repaid on a specified life event, such as death or moving into long term care. This may be suitable for someone who already has a mortgage and there is a shortfall in their repayment, it is affordability based and will avoid interest roll up.
In some cases, your current lender may convert you to a Retirement Interest Only Mortgage or we may be able to find you a lender if this is right for you.
With a Retirement Interest Only mortgage you need to prove you can afford to pay the monthly interest payments and the loan will be settled on the sale of the property.
Advantages for Retirement Interest Only Mortgages
- There is no roll-up of interest
- You are not at risk of rapid equity erosion
- Your estate will be larger than if using a Lifetime Mortgage
Disadvantages for Retirement Interest Only Mortgages
- You must make monthly payments for the whole of the mortgage term
Alternatives to Equity Release in addition to RIO;
- Sell your current property to downsize
- Borrowing the funds you need from your family
- Check out local Government grants to see if you are eligible
- Use of other assets such as investments
Why use The Mortgage Mum for Later Life Lending
A standard Mortgage Broker or Adviser can not discuss Equity Release products with you unless they hold an additional qualification. The Certificate in Regulatory Equity Release (CeRER) is one of the regulated Equity Release qualifications for qualified mortgage advisers, and we are proud to have a number of Mortgage Mums qualified in this area to assist our clients with specialist advice in Later Life Lending.
The Mortgage Mum has already broken the stereotypical mould of how mortgage advisors sell mortgages, and this ethos of client care and compassion is especially needed when dealing with the difficult decisions needed when deciding if equity release is right for you. The benefit of talking things through with a Mortgage Mum is we have the knowledge of traditional mortgages and equity release plans, so we can take an unbiased approach offering you the right solution for your needs.
We are very passionate about including your family in the process, and providing a seamless, protected audit trail to ensure everyone involved is very comfortable and at ease with the decisions made. This is something we pride ourselves on. Open communication, and connecting all the dots on behalf of you and your family.
Our Later Life Lending team are also proud members of the Equity Release Council.
What does the Equity Release Council do?
The Equity Release Council represents the equity release sector and exists to promote high standards of conduct and practice in the provision of and advice on equity release which have consumer safeguards at its heart.
How does Later Life Lending work?
To release equity from your home you need to use a qualified Equity Release advisor, and it is recommended that you choose one who is a member of the Equity Release Council. Here at the Mortgage Mum we have a small dedicated team of expert Later Life Lending Advisors who are passionate about providing the very best customer service to our clients.
When you contact us, you will be put in touch with one of our expert Later Life Lending Team Advisors and they will be your point of contact throughout the process offering honest, transparent and jargon free information to help you decide if Later Life Lending is something you want to do.
Your appointed adviser will hold your hand throughout the process and make sure you fully understand what needs to happen and when.
We are keen to include family members in discussions if you want us to, so we can explain to them what is happening and reassure them we are working to get you the very best outcome for your needs.
- Contact us – You can call or email your initial enquiry and we will arrange a chat to find out what you are looking to do.
- Consultation – We will arrange an initial no obligation consultation. This can be done over a video link, over the phone, or in your home.
- Time to Decide – Discuss your options with family or a friend or ask us more questions if you need more information to decide if you want to proceed.
- Presentation – Once you have happy to proceed, we go off to source you the very best options based on your specific needs and criteria then come back to you with our recommendation. This part is best done face to face or over video link.
- Appoint a solicitor – You can either use your own solicitor or we can assist and appoint a solicitor who specialises in Equity Release. We will liaise with your solicitor to help the process move along smoothly for you.
- Submit an application – We will complete the application form to apply for the Equity Release funds from the bank or Equity Release provider on your behalf.
- Property Survey – The lender will appoint a surveyor to make an appointment with you to value your property before they make a formal Mortgage Offer.
- Legal Work – Your solicitor will go through the Mortgage Offer with you and do the necessary paperwork needed to complete the transaction.