Later Life Lending
People are living longer, working longer and the demand for later life lending is increasing. The main issue is around understanding the options available and avoiding costly mistakes. Independent advice and specialist knowledge helps you make good informed choices.
Why Would I Consider Later Life Lending?
There are many reasons why you may consider later life lending such as –
- Being a viable alternative to using other assets
- Supplementing retirement income
- Holidays, cars and home improvements
- Gifting money to family
- Repaying an interest only mortgage
- Restructuring other debt
Is Later Life Lending The Right Approach?
This is the most important question. Usually this comes down to considering some key points –
- Your individual circumstances, plans and objectives
- Considering alternative options (i.e. other assets, scaling down)
- Loan amount required & purpose
- Whether a Lump sum, drawdown or combination is required
- Affordability, both now and in the future
- Monthly payments, rolled up interest or a combination of both
Further considerations include –
- Entitlement to state benefits
- Involving beneficiaries
- Credit status
- Estate Planning
What Are The Options?
If later life lending is the right approach, it’s common for people to assume that Equity Release is their only option. In reality, this isn’t the case.
There are 3 main options –
- Standard Mortgage
- Retirement Interest Only (RIO) Mortgage
- Lifetime Mortgage / Equity Release
For more detail, please read our Later Life Lending Guide or contact us.
Can I Use My Pension To Take Out a Mortgage?
Yes. Traditionally this was difficult as lenders wouldn’t consider mortgages over a certain age (i.e. 65). However, many will now accept pension income and some have no maximum age.
Furthermore, we work with lenders who can translate the value of a pension into an equivalent income to calculate the potential mortgage balance.
This means that you could take a mortgage without taking money from the pension. This can be beneficial for investment or tax purposes, however we recommend you speak with your Pension Adviser / Wealth Manager regarding this.
Is it Better to Use a Mortgage or My Pension?
This depends on your individual circumstances.
We can’t advise on pensions or investments. However, we can work with your Pension Adviser / Wealth Manager to make sure you get the best mortgage advice based on your individual circumstances.
Whatever your reason, it’s important to seek advice from a specialist who can talk you through your options and help you make good informed choices.
At Symmonds de Lacey, we provide independent mortgage advice and work entirely on your behalf.
If later life lending is right for you, we will make sure that you get the right solution for your needs.