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What is a Lifetime Mortgage in Durham?

A lifetime mortgage is a variation of a later life loan that you have secured on your home. It allows homeowners that meet the eligibility requirements to achieve equity release in Durham. Your loan will be repaid with the sale of your property, once you have either died or moved into long-term care.

When you take out a lifetime mortgage in Durham, you will be using equity that has been sitting within your home throughout your time as a homeowner in Durham.

Many will use this for things like home improvements, inheritance, to pay off their debts, to fund retirement & care costs, amongst other things.

How does a lifetime mortgage in Durham work?

You first need to be eligible for taking out a lifetime mortgage in Durham. This means that you need to be at least 55 years old and also own a property that is at least worth £70,000. There is no requirement for you to still have an active mortgage at this point, it just needs to be your main residence.

In order to make a start on the process of taking out a lifetime mortgage in Durham, you first need to get booked in and speak to a trusted and experienced later life mortgage advisor in Durham. It’s their job to look at your case and see if equity release in Durham or an alternative, is right for you.

Lifetime mortgages are typically found in two main forms. The first one that you will see is a lump sum lifetime mortgage, with the second of these being a drawdown lifetime mortgage.

A lump sum lifetime mortgage works pretty much as the name implies, as an all-in-one release of equity into a lump sum payment. This lets you access the amount you need, as soon as you need it, but will leave you with a much larger loan to pay back.

A drawdown allows you to access the equity in your home and withdraw amounts from it, as you need it. This means you won’t just be releasing all your equity in one go and are saving it for when you need it most. You also will owe less, as you only pay interest on what is released.

With all forms of lifetime mortgage, you are able to simply let your interest roll-up, though this will likely also impact how much inheritance that you can leave behind, once the sale of your home has been completed, with the money from the sale being used to repay your loan.

Thankfully, not only can an expert later life mortgage advisors help you to cordon off a specific amount of equity in advance, for covering any inheritance you wish to leave, but due to our membership in the Equity Release Council, you also get the benefit of having the “no negative equity guarantee”.

This guarantee is a lifeline for a lot of families, as it ensures that your estate never owes more than the value of the property. You can rest assured knowing that your family will never owe more than the property value and struggle financially after your death or you have moved into long-term care.

Pros and Cons of a Lifetime Mortgage in Durham

As is most often the case with any mortgage type, there are both ups and downs to having a lifetime mortgage. The importance of these are dependant on the person taking out the lifetime mortgage in Durham, as well as what their future plans are.

Of course a bigger positive is how flexible releasing equity from your home can be, in using either option, be it the drawdown and lump sum varieties of lifetime mortgage. You also benefit from having flexibility in your monthly mortgage payments.

You can simply let your interest roll-up, which will mean you have more cash to play with as you won’t be making any payments payments per month. The downside is that these will leave you with much less for leaving an inheritance or care when you die or move into long-term care.

The topic of inheritance can be a difficult one for many too, as a vast amount of homeowners look to take out equity release in Durham to make sure this is done. Thankfully, you have the choice to ring-fence some of this equity as well, as your later life mortgage advisor in Durham will help you plan this.

The upside is that, so long as you are able to maintain these payments, you will have a bigger amount to leave behind for your family when you are no longer here. Also, as mentioned, your family will benefit from the no negative equity guarantee, meaning no debt will exceed the home value.

Furthermore, there are now new safeguards in place for homeowners, thanks to the standards set by the Equity Release Council.

Is a lifetime mortgage in Durham right for me?

What this all comes down to, is what it is you are hoping to achieve, combined with your own personal situation. There are many different mortgage types available to homeowners in later life, with lifetime mortgages and equity release in Durham only being a small part of wider options.

As a team of dedicated and trusted later life mortgage advisors in Durham, it is our job to take a look at your case and decide whether equity release in Durham, or an alternative, would be a better option for you to take out.

In many different cases, an alternative is most likely going to be better suited for you. Your later life mortgage advisor in Durham will be able to go over these options with you, before they make a start on the process of equity release in Durham and subsequently, a lifetime mortgage in Durham.

Oftentimes, the more appropriate options can include taking out a personal loan, a conventional mortgages or a remortgage in Durham, retirement interest only, term interest only, to name a few. If a lifetime mortgage is right, your later life mortgage advisor will make sure that all of your needs are met.

This includes laying out a plan for what you wish to achieve in the future, how you predict your circumstances could possibly change, and any inheritance you wish to leave behind.

To gain a better understanding of how we can help with a lifetime mortgage, get in touch with our later life mortgage advice team in Durham today.

To understand the features and risks of equity release in Durham, ask for a personalised illustration.

A lifetime mortgage in Durham
may impact the value of your estate and it could affect your entitlement to current and future means-tested benefits. The loan plus accrued interest will be repayable upon death or moving into long-term care.

Date Last Edited: December 6, 2023

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