Lump Sum lifetime mortgages are the simplest lifetime mortgages to understand. A lender provides you with a lump sum of money and this loan is secured against your property. Interest compounds on the lump sum amount, as well as on top of any interest charged. Interest will keep compounding until the loan is repaid from the future sale of the property.
There are different variations of lump sum mortgages, but all provide you with one single lump sum payment on completion of the lifetime mortgage, with no access to further funds in the future. The interest rate is usually fixed for life however some products charge a variable interest rate instead, and can be slightly lower than an equivalent product that offers a drawdown facility. Because you do not have access to further funds (without taking out a completely new lifetime mortgage) this type of mortgage is often preferred by people who do not anticipate requiring further funds in the future, and do not need access to a suplemental income throughout their retirement.
Provides a large tax-free cash lump sum to use as you wish
Allows you to consolidate and pay off loans and credit cards, allowing more financial freedom
Some products offer an inheritance guarantee feature to help limit any further erosion of your estate
Voluntary payments can be made in order to reduce the amount owed
Available to those with poor credit histories, with no affordability checks
Can help mitigate inheritance tax liability if recommended through an IHT specialist
Can be used toward Buy-to-Let properties, holiday properties or second homes
"retire in comfort..."
All lifetime mortgages are now regulated under the Financial Conduct Authority. Because lifetime mortgages are only available to those in their later years, all lifetime mortgages (and home reversion plans) require applicants to receive financial advice from an equity release specialist, as well as independent legal advice. Because there are multiple equity release lenders offering different products with access to various features, JNS Financial highly recommends that you get advice from a financial adviser who can offer recommendations from across the whole of the market, rather than restricted advice linked to one specific lenders range. We will only introduce you to equity release specialists who are independent, therefore act in your best interests. For more information, please contact us today.