Wouldn’t it be nice to have a bit more than just my pension?
Retirement is a time to enjoy the well-being you deserve and do the things you couldn’t do before because you didn’t have the time. But how can you manage if your pension means you have less income than you used to? And shouldn’t you keep your savings for a rainy day?
It was for this reason that the reverse or quity release mortgage was devised, aimed at home-owners aged over 65. This type of mortgage aims to enable the over-65s to obtain an income from their home.
There are numerous types of reverse mortgage and conditions may differ from one lender to another.
The money may be paid in the form of a lifetime annuity or only for a set number of years. It could also be paid as a lump sum.
The lender may wait for repayment until the property is left to the heirs to collect its debt. There is also the option for the heirs to repay in cash if they prefer not to sell the inherited property.
You can take out a reverse mortgage on your main residence or a second home. If you take the mortgage out on your main residence, the cost of the notary, land registry and stamp duty are relatively low. Things are very different if the mortgaged property is not your main residence, though.
It is therefore essential that you weigh up what suits you best depending on your circumstances and priorities. Our recommendation is that you seek information and think it over carefully. Discuss it with your family or someone you can trust to advise you and help you see it from all angles. And as with any mortgage, make sure you read the contract carefully before you sign.
Be on the look out to make sure there are no surprises.