Retirement Advantage, previously known as Stonehaven Equity Release, has just recently added a new line of products to its existing work in the equity release marketplace. That line of products, Landlord Options, introduces a new concept to the marketplace in that it is available to landlords who let out their properties. With these buy-to-let products, landlords are able to still let out their homes even while they take advantage of an equity release scheme.
One of the three products offered in this line by Retirement Advantage is the Interest Select Option. This option delivers flexibility to homeowners and landlords by allowing choices in payments. The landlord is allowed to pay some, or even all, of the interest that accrues on their loan. The payment amount can be anywhere between 50 and 100% of the interest and the payment term can range from 5 years to the full term of the loan. Landlords can take out loans ranging from £10,000 to £750,000 with the Interest Select option.
The amount and the duration of the payments cannot be changed once the loan has been completed. The exception to this is that homeowners can choose to stop making payments at any time. If they decide to stop making payments, they are not able to resume payments again in the future. The landlord is allowed to miss up to 4 scheduled payments at any time but once that fourth payment is missed, the loan automatically converts to a traditional roll-up loan.
If payments on the loan stop, whether by choice or because a total of 4 payments have been missed, the interest on the interest paying part of the loan increases by 0.2%.
There is no affordability check applied with the Interest Select Option. The LTV’s for the Landlord Interest Select Option start at 9% at age 55 and end at 34% for ages 80 through 90.
One of the most attractive features of many of the products offered by Retirement Advantage is the early repayment structure. This features extends to the Landlord Options series. The early repayment charges remain fixed for the first 8 years of the loan. For years 0- 5 of the loan, the early repayment charge is 5%. For years 6-8, the charge is 3% and for years 9 and more, there is no early repayment charge. This structure applies to all of the products within this line an also applies to any additional borrowing taken by the homeowner.
The applicant must be within the age range of 55 and 90 and if borrowing jointly, the youngest borrower in the couple must not be older than 90 years old.
The value of the property must be between £70,000 and £6 million. However, properties that exceed the maximum amount threshold can still be considered. The property must be let out as a single residence, as multiple family dwellings are not eligible for these products. The property must be located in Wales, Scotland, or England. The property must also be let out for 12 or fewer months through an Assured Shorthold Tenancy, or AST, before the time of loan completion.
Not all applications for these products are accepted and there are restrictions on the types of tenancies that are eligible. Retirement Advantage will not accept applications from limited or limited liability partnership companies. The types of tenancies that are not allowed include those with companies, family members, universities, housing associations, students, DSS tenants, tenants without the right to rent and tenants with diplomatic immunity.
This whole series of products works best for landlords who want to take advantage of an equity release scheme but up until now were unable to do so because they also wanted to be able to let out their property. With Landlord Options, landlords are now able to capitalize on an equity release scheme.
With the Landlord Interest Select Option specifically, the homeowner is able to make flexible payments against the loan and they are able to dictate the amount of those payments and how frequently they want to make payments. That makes this product ideal for those homeowners who want the flexibility in determining what payment options are manageable for their individual situation.
To obtain further information or to request a quotation on the Retirement Advantage Landlord Interest Only Buy-To-Let Lifetime Mortgage, please contact the Retirement Mortgages team on 0800 678 5159 today.