Do not be intimidated or confused by the name ‘Halifax Retirement Home Plan’. This is just an interest only equity release lifetime mortgage scheme that lets people make use of the equity that is tied up in their home. Halifax equity release is great for people who do wish to release tax free cash from their home and have good disposable income to cover the monthly payments.
The retirement home plan maybe a better option for the kid’s as well as the plan is a good alternative to the conventional roll-up equity release schemes. If inheritance is an issue and concern for the beneficiaries, with the stability of the Halifax mortgage balance over the life of the loan it will provide inheritance protection guarantee for them. For some of the older generation, whose attitude to risk is extremely low and averse to borrowing in the traditional sense, and then the Halifax Retirement Home Plan has proved to be an excellent measure.
Stability in Income for Retirees
Pensioner mortgages require a stable source of income from retirees in the later years of their life. The one advantage pensioners have in the realms of affordability is stability of income. Additionally more often than not is the amount of equity residing in their properties. Given the majority of elderly people have lived in their properties for many years; they would have paid what is in today’s terms a meagre value for their main residence.
From paying £2,000 for a bungalow in the North West in the mid 1960’s, experience has shown that this can now have escalated in value to over £200,000. Assuming any mortgage has now been paid off prior to retirement; it clearly illustrates the amounts equity that has built up within those four walls. So after all the hard times and seeing the children successfully move on, now is the time to reap those deserved hard earned benefits. This is where the Halifax Home Plan enters the fray and helps pensioners release this built up equity in the home.
People can use the proceeds of the Halifax interest only lifetime mortgage on anything they want; be it home improvements, paying off debts or generally to support a lifestyle after retirement.
How much equity release is possible?
The Halifax Home Plan offers a minimum equity release of £15,000. If you are not really sure about the amount you can get, you can use an affordability calculator. These lifetime mortgage calculators will assess the exact amount that can be borrowed by collating information such as income, number of applicants, credit status and outstanding credit commitments.
A person can also take professional help from expert financial advisors who will be able to guide them through the whole process. The maximum equity release cannot however exceed more than seventy-five percent of the total value of the property. This is subject to income criteria and can only be based upon retirement income and additional state benefits that may be in payment.
More Conventional Lifetime Mortgages
You have an option of going with a more conventional lifetime mortgage in terms of rollup schemes. Halifax Home Plans work for a select clientele who have income to repay the loan and wish to keep the capital sum the same. If you find you have limitations with this you can consider taking a lump sum payment where the interest rolls up into the loan. All interest and lump sum is due at the end of your life or when you change to a new main residence.
When you opt for this type of product the qualifications can change. For example you do not have to be 65, but 55 for some of the products on the market. You can also take out more in a lump sum with an enhanced lifetime mortgage if there is an illness concern. You would not have the same option with an interest only mortgage. You have a specific limit based on home value and percentage of time you have left based on age.
If inheritance is still an issue and you know the lump sum amounts will not work, you have drawdown lifetime equity release. This type of plan does not require you to take a huge lump sum, but rather smaller payments as you need them. Interest rolls up only on the used portion of money. For some this is a lot easier than coming up with an interest payment each month. Compared products to find what suits your needs and lifestyle.
It is always advisable to seek the guidance of an independent financial advisor if you have any doubts about equity release schemes like the Halifax Retirement Home Plan.