Using equity release on a new property purchase.
"Help! The lease expires at the end of the month and we have not got enough cash to complete the purchase on the new flat."
This was the scenario that a client was faced with. They were on the verge of losing their purchase.
Both of our clients were retired chartered accountants in their late 70's. They were happily living in a rented flat with plenty of income to pay the rent until one of them and broke their leg which would not heal, effectively imprisoning them in the flat. They needed to move into purpose built accommodation in which the injured party could move about more easily. Our clients needed to raise a mortgage for 50% of the purchase price. Previously they had been seen by two 'mortgage brokers' but both of these brokers did not have the appropriate qualifications that are required when advising upon equity release mortgages - they failed to admit this and created a delay in the purchase.
What were the options?
Our clients' son thought that he understood the situation fully, and he had his own opinions as to what should be done, but after speaking with us he understood that we would need at least one meeting on our own with his parents in order to establish their opinions independently of him. When we met our clients we conducted a fact find and then we discussed the options that were available to them. the outcome was that we arranged an interest only mortgage for 30 years as our clients had sufficient income to fund the monthly payments for the mortgage with the flexibility to switch products in the future - which may be a switch to a lifetime mortgage with rolled up interest if our clients so wish.
Our clients are 'safe' in their new flat and their children now have no need to be concerned about their predicament.
The children of our clients are happy because their parents are comfortable in their new flat and their capital was protected by taking the interest only mortgage. The children got their lives back as they had been visiting every day to help their 'injured' mum to move about as her mobility was affected by her broken leg. Their son was so delighted with the outcome, and he told us that we had earned every penny of our fees even before we were half way through the process.
Do you want to move house but you are unable to do so? Speak to us today and see if we can help you.
You should think very carefully about this information. If you are at all unsure about which equity release transaction is right for you, then you should ask your adviser to make a recommendation. We also offer advice on home reversion schemes and conventional mortgages, either of these products may be more suitable to your own circumstances.