You’ve probably heard about later life lending and how it can assist in releasing funds from your property, however may be unsure on whether it’s quite right for you.

You may have researched your options and spoken with friends / family but come out with more questions than answers.

As a specialist mortgage broker based in Bexleyheath we know that this can sometimes be the case and that’s why we’re here – to give you the best advice so you can make an informed decision.

We’ve pulled together seven of the most common misconceptions about later life lending that should help as you look into which is right for you.

1. The lender owns the property, not you

Whilst it used to be the case with home reversion schemes that this was true, more modern products allow for full client ownership when it comes to the property itself.

2. You lose the property with the added interest

This is not actually true. You have the option of servicing the interest or overpaying the mortgage. Also, after a certain period of time you can clear the funds with no early repayment charges. This is typically after five or ten years.

3. Rates are extortionate

So this one is certainly a matter of opinion and what you are expecting, however rates are not actually as high as you might expect.

For example, rates are somewhat comparative to a standard mortgage and the average interest rate is currently just over 5%, based on lifetime mortgages across the UK.

4. I will end up in negative equity

This is a question we get asked a lot and is certainly not the case. Modern later life lending products are now negative equity guaranteed.

5. I don’t have enough income to get an later life lending mortgage

Income is irrelevant when it comes to later life lending as it is based on age and the valuation of your property.

6. I can’t move house/sell

If you have released equity on your home, it’s still possible to move. Provided you meet the lending criteria, when you move you may be able to repay the balance and interest in full or, if the new property meet’s the lender’s criteria, transfer the plan to your new property.

7. I’ve had credit problems in the past, so won’t be eligible

The good news here is that if you have a poor credit score, you are likely to still be able to take out an later life lending plan.

Lenders do check your credit report, but the most important factor is the condition of, and future saleability of your property.

Some lenders may have conditions such as using part of the equity you release to pay off outstanding debts.

Got further questions?

An Later Life Lending product will reduce the value of your estate left to named beneficiaries. Equity release may not always be suitable for you and could affect your entitlement to state benefits.

You must contact a certified later life lending advisor and weigh upon the advantages and disadvantages before you decide if it is right for you.If you’re considering later life lending and have further questions, then please do get in touch and we will be more than happy to help. We’re a small team of mortgage brokers located in Bexleyheath and you can drop us a call on 01322 553282 or contact us online.