Could a Lifetime Mortgage help you?

- Tue 20 Aug 2024

Moving house is one of life’s most significant milestones, filled with excitement, anticipation, and often a fair share of challenges. When you are planning ahead, whether that be for retirement, relocation, or perhaps to restructure your finances more people are looking at options such as Lifetime Mortgages, could it be right for you?

Find out how Lucy and Max Ford turned their Coastal dream into reality with a lifetime mortgage…

Lucy and Max Ford, a happily married couple aged 65 and 68, have spent their lives working hard, raising a family, and now enjoying the well-deserved peace of retirement. For as long as they can remember, they’ve dreamed of spending their golden years in a charming village by the sea. With their children grown and scattered across the UK, Lucy and Max are free to make their dream a reality.

Their current home, valued at £270,000, has no mortgage, and they’ve already found a potential buyer. Properties by the sea come at a more premium price, and the two-bedroom home they’ve set their sights on costs £350,000—£80,000 more than their current property’s value. With their primary income coming from their pensions and limited savings they wish to preserve for future needs, affording the new home seemed out of reach. Traditional mortgage options, like a standard or Retirement Interest Only (RIO) mortgage, would be difficult to secure due to affordability requirements.

Trading Up with a Lifetime Mortgage

Determined to make their coastal dream happen, Lucy and Max explored their financial options and discovered that a Lifetime Mortgage could be the key to bridging the gap. A Lifetime Mortgage allows homeowners to release equity from their property without needing to sell or move out.

For Lucy and Max, this meant they could secure the additional £80,000 they needed to purchase their dream home by the sea. Given their ages, the maximum loan-to-value (LTV) available to them was 30%. However, they only needed to release 23.14% of their property’s value to obtain the lump sum they required. This option allowed them to keep the remainder of their equity intact, giving them the flexibility to access further funds in the future if needed, perhaps for care costs or other expenses.

How It Works

The process was straightforward. Once Lucy and Max secured a buyer for their current home, they set their sights on their new coastal property. With a Lifetime Mortgage in place, they were able to simultaneously complete the sale of their old home, finalise the purchase of their new one, and release the £80,000 needed to cover the price difference. This financial strategy not only enabled them to buy the home they’d always dreamed of but also provided peace of mind knowing they could access additional funds if necessary.

If you’re considering a move or looking to release equity to enhance your retirement, a Lifetime Mortgage might be the solution you, get in touch with Ash Bolt at Bradleys Financial Management who can personally guide you through the process on 01395 222391.

Bradleys Financial Management Ltd and Bradleys Estate Agent are two separate entities.

Could a Lifetime Mortgage help you?

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