Later Life Lending
Broadly speaking Later Life Lending encompasses mortgages which are taken out by people over 55 when the borrowing is either taken out in retirement or will still be in place when retirement occurs.
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Tailored Later Life Lending Advice
At Acorn we will take the time to look at what you seeking to achieve and advise on which product suits you best both for now and in the future whether that be Equity Release, Retirement Interest Only (RIOs) or a standard term mortgage.
Equity Release/Lifetime Mortgages: This is a lifetime mortgage. To understand the features and risks, please ask for a personalised illustration. Check that this mortgage will meet your needs if you want to move or sell your home or you want your family to inherit it. If you are in any doubt, seek independent advice.
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Equity Release
Equity release refers to a range of products letting you access the equity (cash) tied up in your home if you are older. You can take the money you release as a lump sum or, in several smaller amounts or as a combination of both.
Most people who take out equity release use a lifetime mortgage. Usually you don’t have to make any repayments while you’re alive. Instead, interest is ‘rolled up’, which means the unpaid interest is added to the loan. This means the debt can increase quite quickly over a period of time. However, some lifetime mortgages do now offer you the option to pay all or some of the interest, and some let you pay off the interest and capital. In the same way ordinary mortgages vary from lender to lender, so do lifetime mortgages.
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Retirement Interest Only
A retirement interest only (RIO) mortgage is a loan secured against your where making the monthly interest payment is a contractual obligation. They’re similar to standard interest only mortgages, but with key differences. With most RIO mortgages in the UK, you only repay the loan when you sell your property, move into full-time care, or pass away.
Similar to a standard mortgage, you’ll have to prove you can afford the monthly interest repayments. To take out a retirement interest only mortgage, it’s vital to get expert advice from a qualified mortgage adviser. That’s where the experienced team at Acorn can help
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Term Mortgage
Many lenders now offer fixed term mortgages when the borrowers are retired. As there is a monthly payment to be made the loan amount is based on affordability, so we’ll calculate how much you can borrow based on your circumstances and see what payments you can make each month.
As a minimum, you’ll need to be able to prove your income through employment and/or pension to show you can afford the monthly repayments.