Independent equity release advisors

Background

The client’s aim was to gift £500,000 to their five children for property purchases.

The client’s main residence was freehold and valued at £1,500,000. Both clients were retired, in good health, independently wealthy and planned to remain in their main residence for the rest of their lives.

During the initial fact-finding process it was discussed whether they could add a cash reserve of £250,000 to the loan in addition to the initial borrowing requirement of £500,000 should funds be needed in the future.

Solution

We then met with the clients at their home and we confirmed their objectives, the indicative terms available and answered all of their questions. This initial meeting is known in the industry as a fact-finding/discovery client meeting. With a detailed understanding of their requirements, we approached multiple Equity Release (Lifetime Mortgage) lenders who were considered to be able to assist for this size of loan and we obtained terms.

We looked for a loan of £750,000 split between the initial loan of £500,000 and a cash reserve of £250,000.

We discussed the options available and progressed with a Lifetime Mortgage solution with an interest rate payable of 5.15% per annum with the ability to make overpayments of up to 10% per annum if the clients so wished.

Outcome

By taking out a lifetime mortgage the clients were able to release £500,000 to be gifted to their children (Potentially Exempt Transfer) to enable them to purchase additional properties. In doing so they will potentially reduce the Inheritance Tax bill by £200,000, payable on the second death should they live for at least seven years. They also released £250,000 for their own use giving them the chance to enjoy their asset base during their retirement.  The clients were most importantly able to see their children benefit from early inheritance gifts.

Background

The client owned outright a leasehold flat that was on a large purpose-built complex. The management company had carried out a survey and found that substantial roofing repairs and replacement was required to maintain safety and therefore requested that all owners make a contribution towards the shortfall in costs. The client received an invoice requesting funds, made over two payments within a 12-month period.

Solution

We then met with the client at their home and carried out our initial fact-finding meeting.

We looked for a loan of £25,000 to meet the value of the invoice. Other than this the client had no reason to require additional funds.

After completing research, we discussed the options available and progressed with a Lifetime Mortgage solution with an interest rate payable of 2.9% per annum and with the ability to make overpayments of up to 10% per annum, if the client so wished.

Outcome

By taking out a lifetime mortgage the client was able to pay the required repair bill, putting their mind at ease.

The clients owned a 3-bedroom semi-detached home. They had an outstanding interest-only mortgage which the term was due to expire meaning their existing mortgage lender wanted this repaid in full. They had both recently retired and started to receive pension income. The household income could not support payments on a traditional mortgage, interest rates had risen and in addition to this allowed this couple to enjoy their retirement. To ease the burden of interest payments and free up as much disposable income to use in their early years of retirement they wanted to consider the options available. These clients also had the dream of purchasing a motor home so they could enjoy travel with their dogs. The clients had no children, only siblings with nieces and nephews.

Solution

We met with the clients at their home and carried out our initial discovery meeting.

We looked for a loan of £86,000 which was equal to the balance of the outstanding mortgage and the amount they ideally wanted to allocate towards a motor home.

After completing research we discussed the options available and progressed with a Lifetime Mortgage solution with an interest rate payable of 7.1% per annum. The clients stated they were unlikely to make any overpayments but the loan allowed payments of up to 10% if the clients changed their mind.

Outcome

By taking out a lifetime mortgage the clients were able to repay the balance of their interest-only mortgage, save the monthly payments and also purchase a motor home. They could then enjoy their early years of retirement whilst their health allowed it.