After two years, the banking sector seems to have calmed down again, and whilst things have not returned to normal in regards to them lending money to home buyers, it is getting slightly better. In fact, there are now all manner of mortgages, loans and equity releasing deals becoming available. From things such as an interest only lifetime mortgage to endowments and more besides, the choice can be quite bewildering.
Therefore, it is a sensible idea to seek some form of financial advice from one or more sources. Everyone’s situation is different, and whilst re-mortgaging a home may be suitable for some people, it will be a bad idea for others.
There are many websites online which provide great, free impartial advice and these are a good place from which to do some initial groundwork. Martin Lewis over at Money Saving Expert has one such website, and it is visited by hundreds of thousands of people every week.
With the groundwork done, it is then time to get some independent advice before finally approaching a bank for a loan or other financial arrangement. An important thing to keep in mind, is that even though you may make a decision now on what scheme to use, you should really have one which gives the flexibility that it can be changed with little or no penalty.
The process is long for taking out a home equity release mortgage or reversion plan. It can take 6 to 12 weeks depending on which scheme you decide to enter into. Additionally, interest only lifetime mortgage is just one option open to you.
When you find financial advice you want to look at more than just one Internet blog, forum, or article website. It is helpful to get an idea of what you might enter into by speaking with retirees who have already gone through the process. It is also in your best interest to search around and see what myths might have appeared on various sites. In this way you can ask your adviser what is factually accurate and understand why there might be a little confusion over the entire matter.
When home reversion was first announced to the market a lot of misunderstandings appeared online. One of the biggest misunderstandings was about selling your home and then having to pay rent to the new owner just to remain in the home. Actually, what happens is that you sell a part or all of your home to an equity release provider and obtain a lifetime tenancy agreement in return stipulating no rent is required as long as you live in the house. It is only when you and anyone named in the contract move out that the house has to be sold.
As you can see from the above explanation, there is definitely cause for misunderstandings which leads to a definite need to seek proper financial advice. The interest only lifetime mortgage is an actual mortgage where the principle balance is due at your death or when you decide to move out of your home. This can mean your home has to be sold to cover the mortgage. The good news is you have paid interest towards the loan balance, so the only amount left at the time the house is sold is the principle.
Since you will have different steps to the home equity release process, you will want to have advice along the way. Here are some of the steps you might want advice on:
1. Post-groundwork advice when you have read all you can about equity release schemes and particularly about an interest only lifetime mortgage is beneficial. Advice clears up any points of worry you might have.
2. An application is required to determine if you qualify for any equity release option. It can be a good idea to explore the application with the help of an adviser to read through some of the legal jargon.
3. The next stage is even more imperative with regards to advice as it stipulates the true point of decision making. Once you are approved for a plan or plans, it is time to decide what your best option is for you and your remaining family. Here legal and financial advice on potential pitfalls can be golden.
Interest only lifetime mortgage plans are there to help you as a retiree to live your life in comfort with minimal worries. An adviser in this financial market ensures you go in with your eyes open before signing any contracts.