Do you really WANT to downsize?

Downsizing as a method for repaying a mortgage can sound like a perfect plan when the decision is years ahead. The reality is that in many cases, when the time comes, clients do not actually want to leave their homes. Equity Release could be one if the options to explore if it seems that moving is the only alternative:

‘New research from Bower Retirement shows that nearly one in five would-be downsizers change their minds and decide to release property wealth through equity release. The main reasons for not going ahead including the cost of moving, with 55% of Bower advisers saying customers change their minds because of the expense. Emotional reasons are also a major issue for not going ahead with downsizing with around half of Bowers’ advisers saying clients did not want to move away from family and friends. Andrea Rozario, chief corporate officer at Bower Retirement, said: “Downsizing is logical and sensible and can work for some over-55s homeowners, but only if they can find the right house at the right price. But there are financial issues to deal with when moving house with stamp duty alone costing 5% on house prices above £250,000 which can make the decision to move uneconomic. Buying a £300,000 home would cost around £5,000 in stamp duty. It is also not just a financial calculation as there are emotions involved when moving home with the risk of losing touch with family and friends making downsizing seem a bad idea for many.” ‘

(What Mortgage, June 2017).

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Your home may be repossessed if you do not keep up repayments on your mortgage.

A fixed rate for life

With so much uncertainty in the mortgage market at present the security of knowing a borrowing rate is fixed for life can be reassuring. Whilst Equity Release or Lifetime Mortgage options are not right for everyone, the security of knowing the interest rate is fixed for life can provide some reassurance when planning for the future:

• ‘Rachel Springall, finance expert at Moneyfacts.co.uk, said: “The rise in product choice and reduction in cost for fixed deals will be exciting news for those who have equity locked up in their homes and are eager to make better use of the cash. New brands, more drawdown options and an influx of incentives have also appeared to appeal to a variety of customers.” ‘

(What Mortgage – April 2017).

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Your home may be repossessed if you do not keep up repayments on your mortgage.

Retirement is not cheap!

There is a general feeling that at retirement we won’t need as much money as we did earlier in life. Many people, in fact, find the opposite as they wish to pursue hobbies, interests and a lifestyle that they did not have time for when working full time. This all comes at a cost and one which many people’s pension cannot provide:

• ‘Alice Watson, head of marketing at Retirement Advantage Equity Release, said: “There is a huge gap between what we want in retirement and what our pensions alone will be able to fund. “We need to break down the long-held views that we do one thing with our pension and ISAs and something different with our property, and instead consider how they can work together to generate an income in retirement. Too many people are missing out on the retirement they want and deserve because they’re unaware of all the options available to them.” ‘

(What Mortgage – January 2017).

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Your home may be repossessed if you do not keep up repayments on your mortgage.

Equity Release funding the “Bank of Mum and Dad”

Many people still consider Equity Release a “last resort” however an increasing number of people are choosing this route to help other family members. There is a mindset that “they will get it in the end anyway” so many parents are considering Equity Release as a way to provide their children the financial support they need at the time when they actually need it, rather than waiting until inheritance is due. The trend is demonstrated in the following article:

(The Guardian – January 2017).

https://www.theguardian.com/money/2017/jan/28/is-equity-release-good-way-pay-off-interest-only-home-loan-capital

By Clicking on the above link, you are now departing from this site. Neither Sarah Ferrell nor Intrinsic are responsible for the accuracy of the information contained within the linked site.

Your home may be repossessed if you do not keep up repayments on your mortgage.

Equity Release rates at an all-time low

A familiar concern is that rates for Equity Release borrowing are significantly higher than other finance options however this recent report shows how low rates are for retirement lending. There is a general concern that the cost of Equity Release is considerably higher than other forms of lending however with a fixed rate for life in many instances the current rates look more attractive than they have in the past:

(Professional Adviser – January 2017).

http://www.professionaladviser.com/professional-adviser/news/3002203/low-equity-release-rates-spark-switching-inquiries-research

By Clicking on the above link, you are now departing from this site. Neither Sarah Ferrell nor Intrinsic are responsible for the accuracy of the information contained within the linked site.

Your home may be repossessed if you do not keep up repayments on your mortgage.

Interest Only Mortgages – how Equity Release can help

I speak with many clients who think that if their Interest Only Mortgage is due to end they will have to sell their home and move to be able to pay off the mortgage. Whilst this is a solution that could be considered, many people do not WANT to move and therefore Equity Release can be used as a safe and affordable alternative to moving house. There are many retirement lending options which are, essentially, Lifetime Interest Only mortgages so Equity Release can be a solution in this situation and can relieve the pressure of knowing there is an “end date” by replacing the mortgage with a lifetime scheme.

(The Guardian – January 2017).

https://www.theguardian.com/money/2017/jan/28/is-equity-release-good-way-pay-off-interest-only-home-loan-capital

By Clicking on the above link, you are now departing from this site. Neither Sarah Ferrell nor Intrinsic are responsible for the accuracy of the information contained within the linked site.

Your home may be repossessed if you do not keep up repayments on your mortgage.

44% of Equity Release transactions used to help family

Whilst Equity Release can be used to repay debt, it can be used for so many other reasons. As increasing number of people are using it as a method to help other family members and, as published by Key Retirement recently, the amounts vary considerably with 44% of clients gifting around £20,000:

Last summer Key Retirement published research showing that more than two-fifths (44%) of those unlocking equity to pass on to family members were gifting £20,000, 18% were paying out more than £50,000, and 6% more than £100,000. It found that where they were helping someone get a foot on the property ladder, the average amount contributed was £33,350. “Many retirees don’t relish the thought of their children and grandchildren going without, and are happy to step in to ease the financial pressures on families just starting out,” the firm said.

(The Guardian – January 2017).

https://www.theguardian.com/money/2017/jan/28/is-equity-release-good-way-pay-off-interest-only-home-loan-capital

By Clicking on the above link, you are now departing from this site. Neither Sarah Ferrell nor Intrinsic are responsible for the accuracy of the information contained within the linked site.

Your home may be repossessed if you do not keep up repayments on your mortgage.

Mindset changes over where our retirement income comes from

It has not been previously considered to take one’s property into account when looking at how to finance retirement however this is starting to change. Many people are confused about their pension options and many people are finding that the figures they are looking at when assessing their retirement income are not going to fund the lifestyle they hope to live.

There is starting to be a shift in thinking whereby taking the property into the equation then opens up other finance options. This is where professional financial advice is needed to fully understand the options.

(What Mortgage – January 2017).

By Clicking on the above link, you are now departing from this site. Neither Sarah Ferrell nor Intrinsic are responsible for the accuracy of the information contained within the linked site.

Your home may be repossessed if you do not keep up repayments on your mortgage.