Equity release advice reveals couple were eligible for standard mortgage

Kevin and Judith had an existing mortgage and were looking to borrow additional funds to purchase a static caravan. When completing the full equity release fact find, it became obvious they could actually achieve what they wanted on a standard repayment mortgage.

Many mainstream mortgage lenders were closed off to them as affordability considerations would limit the size of loan they could afford to service beyond the point of reaching state pension age. Others had maximum age limits which ruled them out of the equation, while the presence of recent and historic instances of adverse credit on their report further restricted their options.

After exploring various options, Kevin and Judith’s adviser was able to identify a lender who would consider adverse credit as well as allowing a mortgage term that would extend into retirement. Having secured a repayment mortgage, both Kevin and Judith were happy with this outcome. They are both relatively young and could demonstrably service the interest on their loan.

Deferring the decision to use equity release means, should they need this option in the future, they will have the benefit of having more equity to draw on as a result.

This case study was supplied by Probity Mortgage Services. The picture is posed by models.

It first published in the Council’s Anniversary Report in January 2022. To read the report please click here.

Equity release helps with care home fees

Ruth turned to equity release in her late eighties, when she was in poor physical health and had for some time employed an agency carer at home, which was a cost she was funding privately.

This had taken its toll upon Ruth’s savings to the point that her family were concerned that the arrangement would need to end. It was crucially important to Ruth that she be allowed to remain in her own home and her family felt it would have a detrimental effect upon her health if she moved into an assisted living placement or a care home.

Having discussed alternatives such as family assistance, Ruth opted for a drawdown lifetime mortgage where the initial withdrawal was sufficient to meet her care costs for the next 12 months. Given her age and the relatively low initial sum that was released, she was able to secure an interest rate of 2.50% (in 2021) and agree a sizable reserve fund because additional funds may be required to meet ongoing care costs in future years.

The equity release plan has given Ruth the comfort and peace of mind of knowing that her care at home may continue indefinitely.

This case study was supplied by Bower. The picture is posed by models.

It first published in the Council’s Anniversary Report in January 2022. To read the report please click here.

Equity release helps son with deposit for home

The Covid-19 pandemic has been challenging for people in many different ways, including Evadne’s son who moved in with his mother and, having rented his whole life, had practically given up any aspirations of owning property.

Having already downsized after the death of her husband, Evadne thought she was limited in the financial help she could offer until she looked into lifetime mortgages. While her son was initially concerned about the impact this would have on Evadne’s plans in later life, she explained that she would sell the property if she had to go into care.

Taking an optional payment lifetime mortgage meant her son could pay the interest each month. For Evadne, it was the perfect solution. Her son was able to put down a deposit on a house, enabling him to relax and move on with his life. Evadne was able to remain in the home she loved while supporting her son in regaining his independence. She also bought a new boiler, updated her lounge, and has kept some money back for a couple of holidays including a special trip to Montenegro. It was a place her husband had always wanted to visit but wasn’t able to before he passed away. “I feel as if I’m going for him. I call this stage of my life, my third adventure, not retirement.”

This case study was supplied by Legal & General.

It was first published in the Council’s Anniversary Report in January 2022. To read the report please click here.

Equity release frees mortgage prisoner

“I was in reasonable health, but an injury meant I was unable to work. I owned my own home with a small mortgage, which was my only asset, and was struggling financially.

“My interest-only mortgage was also coming to an end and I was told I couldn’t extend the term. I was trying to downsize but received no sensible offers on my property.

“I was really worried and having trouble sleeping, until I was introduced to a specialist adviser by a friend. I felt so much better to learn I could use a lifetime mortgage to replace the existing loan.

“Using equity release allowed me to clear my mortgage and reduce my outgoings. I was also able to repay friends who had helped me to make ends meet. Releasing equity was the best financial decision I have made, and both my adviser and conveyancer made the whole process straightforward.

“I have subsequently sold my property and moved to a lovely house with my partner, taking the lifetime mortgage with me. Life could not be better, and my partner and I hope to get married in the next couple of years.”

This case study was supplied by Lucra. The picture is posed by models.

It was first published in the Council’s Anniversary Report in January 2022. To read the report please click here.

Equity release helps with living costs and supports son

Marion is single and retired. She receives a state pension and a small occupational pension, which allows her to cover day-to-day living costs without making significant savings or being able to pay for larger expenses.

She wished to raise funds to pay for improvements to her home in Essex and make a cash gift to assist her son. She was apprehensive about equity release owing to the effect of interest rolling up and was also concerned it might prevent her from moving home again. At her adviser’s suggestion, a close friend of Marion’s attended their meeting to provide an independent view on the discussion.

The adviser explained the key features of equity release plans including fixed interest rates, a no negative equity guarantee, the ability to port the mortgage to another property and drawdown facilities. Marion felt confident to proceed and especially liked that the fixed rate made it possible to predict how much would be outstanding in future years.

She was delighted with the outcome as it meant she achieved her objectives of improving her property and assisting her son. By opting for a plan where interest rolls up, she is not committed to making payments that would have overstretched her budget.

This case study was first published in the Council’s Anniversary Report in January 2022. To read the report please click here.

Equity release adviser discovers client is owed £132k in unclaimed benefits

Peter Williams hit the headlines when he discovered he was owed almost £133k in unclaimed state pension. Graeme Donegani, the equity release adviser that uncovered the windfall explains more.

It’s not every day that you can help to completely transform a person’s life for the better.

In my role as a lifetime mortgage adviser, I meet with customers almost every day and every one of them has a story to tell. They are opening up about something deeply personal — their financial situation — and how that will stack up in the future.

Many approach equity release because they are excited about the possibilities it opens up, either for themselves or for their families. Some are hopeful of enabling their children or grandchildren to own a property. Others are preparing to use some of their money for the adventure of a lifetime or to make home improvements. But there are some customers who consider equity release because unlocking the wealth in their property feels like their only option. These customer stories are often the ones which stick with you.

Take Peter Williams, a 76-year-old customer from Wales who contacted the company I work for, Responsible Life, because he wanted to carry out improvements on his home. On the face of it, he was no different to the hundreds of other people I meet every year who have similar plans but Peter’s story stands out. He was struggling with his finances. He was a sociable man who enjoyed going on holidays to Spain and Portugal and visiting friends down the pub. Yet he was living on his two workplace pensions worth £234 and £275 a month.

He had spent his life savings and inheritance trying to get by. He approached us about equity release as he needed some money for repairs to his property. The summary of Peter’s finances left a lasting impression on me because it is almost impossible to imagine living on £509 a month. With the average expenditure per person on food and drink estimated by the Office of National Statistics last year to be £26.34 a week (and those calculations are a couple of years old), that’s a fifth of your money gone on essential shopping alone. Not to mention the growing cost of electricity bills, or that council tax on an average band D property in Cardiff works out to be about £146 a month.

I carried out our routine benefits checks, and it became clear that Peter had never received his state pension. I called the state pension line with Peter sat beside me, and found out he was owed £274 a week, starting immediately, and back payments totalling £132,800. Peter had filled out his pension forms when he retired but, after not hearing back from the government, he assumed he was not eligible and never chased it.

Clearly Peter did not need equity release after all. I am frequently reminded of his story, even though he never became an equity release customer. Firstly because it acts as a great reminder that not everyone is aware of what they can claim, or how they should claim it. Independent financial advice remains crucial. Secondly, it reinforces to me that what we are doing in the equity release world matters to people. We assume that it transforms their finances, and this can be enough for most people — but it can also completely change lives.

We must all continue to do our best to ensure we are checking every corner of our customers’ financial history. Peter’s thanks meant the world to me after we’d helped transform his future, and there will be others out there like him. Let’s find them.

Image: Graeme Donegani, Responsible Life