Kevin Hull: 0800 612 7362 kevin.hull@therightequityrelease.co.uk

Equity Release Case Studies

Residential

Meet Michael and Victoria

At A Glance

Enquiry: Home improvements.

Applicant: Couple: Male 71 and Female 69 years.

Background: Homeowners for over 20 years. Don’t want to move but need to access equity to fund home improvements but would like to leave an inheritance to their family.

Solution: Capital and Interest Lifestyle Mortgage.

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Michael 71 and Victoria 69 are retired, enjoy having friends and family over and look after their grandchildren some weekends. They live in London and bought the home when they were in their early 50s.

They have decided they would like to make some home improvements; update their long serving kitchen and transform one of the bathrooms into a wet room. Although they both receive state and private pensions, they don’t have a lump sum of money to pay for making these improvements and were interested in finding out more about a Capital and Interest Lifetime Mortgage.

They needed a lump sum upfront, but could afford to pay all of the interest in some of the capital back each year. This means that over time, the loan will be paid off and Michael and Victoria can enjoy their home improvements knowing that they’re are also able to leave an inheritance to their family.

This case study is a worked example and are for illustrative purposes only. Customers will need to seek their own tax advice and should not place any reliance on the figures illustrated. We have taken care to show information is accurate but we accept no liability for any of the information we provide. Figures and tax rates correct at as at April 2017. Past house price growth is not a reliable indicator of future growth. The value of the property may go down as well as up. Find out more about Lifetime Mortgages, please call us on 0800 6127362 or visit www.home-equityrelease.com

Mortgage
Settlement

Meet Jane and Andrew

At A Glance

Enquriy: Mortgage Settlement.

Applicant: Couple, Male 61 and Female 60 years.

Background: Homeowners with an outstanding mortgage of £42,000 which expires in a year on a property currently valued at £675,000. They would like to avoid repossession problems before their mortgage term expires and want to release capital to continue living in their home without interest roll-up.

Solution:  Voluntary Interest Payment Lifetime Mortgage.

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Jane and Andrew are in their early 60s and are both still working. They live in a semi-detached house in Bromley which is valued at £675,000 with an outstanding mortgage of £42,000. Their bank mortgage term expires in 2019 and they need to repay the outstanding amount and they know that if they can’t release the capital to pay off the mortgage, their home could eventually be repossessed.

Their current mortgage provider told them that it was not possible to extend their mortgage term, and so they applied to other High Street banks, but again were turned down. They began to worry about what to do, and needed to find a solution. They decided against downsizing, as they didn’t want to leave the local community and their home was conveniently located for their jobs. After consulting an expert, they were introduced to the concept of an Interest Only Lifetime Mortgage.

It would operate in a similar way to their current mortgage, but they could release some money from their home, and each month a fixed amount would be collected from the nominated bank account to service the interest. This will allow them to clear their mortgage shortfall, without needing to move home, while allowing them to eliminate any interest roll-up on the loan. This was a sensible solution for Jane and Andrew, as they were able to clear the outstanding mortgage without giving up their home they had lived in for 25 years.

This case study is a worked example and are for illustrative purposes only. Customers will need to seek their own tax advice and should not place any reliance on the figures illustrated. We have taken care to show information is accurate but we accept no liability for any of the information we provide. Figures and tax rates correct at as at April 2017. Past house price growth is not a reliable indicator of future growth. The value of the property may go down as well as up. Find out more about Lifetime Mortgages, please call us on 0800 6127362 or visit www.home-equityrelease.com

GIFTING

Meet Patrick

At A Glance

Enquiry: Gifting to Grandchild.

Applicant: Male 78 years.

Background: Wishes to unlock equity to help granddaughter with a deposit for a new property purchase, in addition to having the ability to   access further funds, if required, in the future.

Solution: Interest Roll Up Lifetime Mortgage with the option to make voluntary interest payments.

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Patrick 78, has watched his only grandchild grow up, and his proud that she is working in a good job in London. He has seen that she is struggling to save each month, as she spends what she earns on day to day living. He wants to gift her some money and decides to help her with a deposit for her flat. He has decided he wants to give her inheritance now, when she most needs it. Patrick spends all of his income each month, so he has been advised to look at an interest roll-up Lifetime Mortgage.

Patrick doesn’t have a lot of savings and he’s worried about needing some more capital later down the line. Because of this Patrick has added a cash reserve facility to the Lifetime Mortgage. This means that a set amount of money is available to Patrick in the future, which he can access without taking advice. So, if he needs a lump sum later on, he can make a withdrawal without incurring more costs.

Patrick was happy with this as he was able to see his granddaughter enjoy her inheritance at a time when she most needed it, and also has an emergency fund, which he can choose to access if he needs to.

This case study is a worked example and are for illustrative purposes only. Customers will need to seek their own tax advice and should not place any reliance on the figures illustrated. We have taken care to show information is accurate but we accept no liability for any of the information we provide. Figures and tax rates correct at as at April 2017. Past house price growth is not a reliable indicator of future growth. The value of the property may go down as well as up. Find out more about Lifetime Mortgages, please call us on 0800 6127362 or visit www.home-equityrelease.com

DEBT
CONSOLIDATION

Meet Susan

At A Glance

Enquiry: Debt Consolidation.

Applicant: Female 56 years.

Background: A recent widow with reduced pension payments and outstanding debts.

Solution: A Lifetime Mortgage which allowed ad hoc payments. Susan consolidated her debts with the knowledge her children would still have an inheritance.

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Susan’s husband, George, died at the age of 60, a few weeks after being diagnosed with cancer. Susan and their three children were shocked at how quickly it all happened. Susan is now 56, and has been left with a credit card debt, which has built up over the last five years because she had only been paying off the minimum balance, due, with the view of settling total balance with George‘s pension later on down the line.

When George died, his pension payments were reduced and Susan realised that the amount she now received as income, only just covered her day-to-day living. She had credit cards with outstanding balances and she began to miss the minimum payments due on them.

Her financial advisor told her that a Lifetime Mortgage was a sensible way to consolidate unsecured debt. By taking a Lifetime Mortgage which allowed ad hoc payments, Susan was able to consolidate the £20,000 due on credit cards. She could then start to make interest payments and start paying one lower monthly payment of £100. This has allowed her to regain control of her finances. By making regular interest payments she is keeping the mortgage balance level, and is able to leave an inheritance to her three children.

This case study is a worked example and are for illustrative purposes only. Customers will need to seek their own tax advice and should not place any reliance on the figures illustrated. We have taken care to show information is accurate but we accept no liability for any of the information we provide. Figures and tax rates correct at as at April 2017. Past house price growth is not a reliable indicator of future growth. The value of the property may go down as well as up. Find out more about Lifetime Mortgages, please call us on 0800 6127362 or visit www.home-equityrelease.com

LONGTERM
CARE

Meet Valerie

At A Glance

Enquiry: Funding Longterm Care.

Applicant: Female 85 years.

Background: Primary residence currently valued at
£450,000 rented out on an AST with an annual yield of £18,000 (4% yield).

Solution: Buy-to-Let Lifestyle Mortgage for over 55s.  She still owns the property has the flexibility to sell the property in the future.

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Valerie moved out of her primary residence in May 2013 and has been living in residential care since then. Her primary residence has been rented out since April 2014 with a 12 month Assured Shorthold Tenancy agreement in place. She needs to raise some capital to pay for her care, but does not want to sell her property. Traditional lenders will not lend to Valerie, so she would have been forced to sell her property to fund her care.

Her financial advisor introduced her to Buy-to-Let mortgages for over 55-year-olds, which gives her the option to raise finance against her property to fund her care. Her property in Essex is worth £450,000 so she can raise up to £153,000. She can raise this in one lump sum, or can borrow a small amount upfront and borrow more in instalments, by taking out further advances when required.

With a Buy-to-Let Mortgage, Valerie was able to keep hold of her income generating family home, with no affordability checks on minimum income requirement. She can now afford to pay for her care and still pass on her family home to her children, enjoying peace of mind, as the loan does not need to be refinanced during her lifetime. She still owns an asset which produces in the region of 4% yield (£18,000 per year annually). She and her estate may still benefit from future capital gains on the asset (subject to the impact of interest running up) but have the flexibility to sell the property and release the remaining equity in the future.

This case study is a worked example and are for illustrative purposes only. Customers will need to seek their own tax advice and should not place any reliance on the figures illustrated. We have taken care to show information is accurate but we accept no liability for any of the information we provide. Figures and tax rates correct at as at April 2017. Past house price growth is not a reliable indicator of future growth. The value of the property may go down as well as up. Find out more about Buy-to-Let Lifestyle Mortgages, please call us on 0800 6127362 or visit www.home-equityrelease.com

UNLOCK
BUY TO LET
POTENTIAL

Meet Nick and Jenny

At A Glance

Enquriy: Gifting to Grandchildren.

Applicant: Couple, Male 75 and Female 73 years.

Background: Buy-to-Let residence currently valued at £550,000 rented out on an Assured Shorthold Tenancy with an annual yield of £22,000 (4% yield).

Solution: Buy-to-Let Lifestyle Mortgage for over 55s and gifted £74,000 to their two grandchildren.

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Nick 75 and Jenny 73 have owned a Buy-to-Let property for 25 years and now the mortgage is fully paid off. They have two grandchildren who they would like to gift some money, but wish to keep the property. The property has increased in value from £120,000 in 1992 to £550,000 in 2017. Traditional lenders will not lend to Nick and Jenny and the grandchildren would like the ability to make payments to reduce the impact of interest roll up, but would also like flexibility.

After reviewing their options, Nick and Jenny decide to take out an Over 55 Buy-to-Let Voluntary Select Mortgage which means they were able to keep hold of her income generating Buy-to-Let property, with no affordability checks or minimum income requirements. In doing this they avoided crystalising and a capital gains tax liability of £120,400.

Their solution was simple and they were able to make a gift to each of their two grandchildren of £74,000 to help them get on the property ladder. They still own an asset which produces in the region of 4% yield (£22,000 per year annually) and they avoided additional selling fees. They may still benefit from future capital gains on the asset (subject to the impact of interest rolling up) and have the flexibility to sell the property and release the remaining equity in future.

The voluntary select product allows them to make voluntary payments of up to 10% of the initial loan amount each year without paying an early repayment charge. By taking out this lifetime mortgage, Nick and Jenny have the ability for them, or their grandchildren to make payments of up to 10% of the original loan balance each year, without paying an early repayment charge, which will reduce the amount of interest the rolls up. In addition they have complete flexibility to decide whether or not they want to make payments, how much they want to pay and when in addition to being on an indefinite term, so they won’t have to refinance before the last surviving borrower dies.

This case study is a worked example and are for illustrative purposes only. Customers will need to seek their own tax advice and should not place any reliance on the figures illustrated. We have taken care to show information is accurate but we accept no liability for any of the information we provide. Figures and tax rates correct at as at April 2017. Past house price growth is not a reliable indicator of future growth. The value of the property may go down as well as up. Find out more about Buy-to-Let Lifestyle Mortgages, please call us on 0800 6127362 or visit www.home-equityrelease.com

Kevin Hull Equity Release Specialist

Kevin Hull is a member of the Equity Release Council and an authorised consultant of The Right Equity Release.

This is a lifetime mortgage or home revision plan.

To understand the features
and risks, ask for a personalised illustration.
It may affect your entitlement to state benefits and will reduce the value of your estate.

Think carefully before securing other debts against your home.

Kevin Hull Equity Release Specialist is an introducer to The Right Equity Release Ltd which is Authorised and Regulated by the Financial Conduct Authority.

Registered in England and Wales No. 07166676. Registered Address: Croft House, 21d Station Road, Knowle, Solihull, B93 0HL.

Head Office: Croft House, 21d Station Road, Knowle, Solihull,
B93 0HL.

The advice and guidance contained within this website is subject to the UK regulatory regime and is therefore targeted at consumers based in the UK.

The advice and guidance contained within this website is subject to the UK regulatory regime and is therefore targeted at consumers based in the UK.

The Right Equity Release does not charge any up front fees.

A fixed fee is only charged on completion of an Equity Release Plan. Typically, this is 1.5% of the total facility or £995 whichever is the greater.