Lifetime mortgages can seem confusing, but they’re much simpler than people think. Let’s bust five of the biggest myths so you can understand what they really are and decide if they’re right for you.
Myth 1: You Lose Ownership of Your Home
This isn’t true. With a lifetime mortgage, your home still belongs to you. The lender only puts a charge on your home, like a marker, to show they’re owed money. But you stay in full control and can keep living in your home just like before.
Myth 2: Your Family Will Be Left with Debt
Lifetime mortgages come with something called a “no negative equity guarantee”. This means no matter what happens, your family will never owe more than the value of your home when it’s sold.
Even if house prices drop or the loan grows due to interest, your loved ones won’t be stuck paying the difference. The amount borrowed is covered by the sale of your home after you’re gone or if you move into long-term care.
Myth 3: You Can’t Move House
You can move! Most lifetime mortgages let you take your plan with you if you want to move. This is called portability. As long as your new home meets the lender’s rules - like being worth enough to secure the loan – you’re good to go.
So, whether you want to downsize, move closer to family, or find your dream retirement spot, a lifetime mortgage won’t hold you back.
Myth 4: You Have to Be Wealthy to Get One
Lifetime mortgages aren’t just for the wealthy. They’re for anyone aged 55 or older who owns a property worth at least £70,000 to £100,000.
It doesn’t matter if you have savings or not – what counts is the value of your home. Homeowners of all incomes use lifetime mortgages to help fund retirement, pay for home improvements, or support family members.
Myth 5: They’re Not Worth the Hassle
Lifetime mortgages are simpler than you might think, but it’s always important to get good advice. Here’s a quick rundown of how the process works:
- You talk to a qualified financial adviser who’ll explain everything to you.
- A solicitor goes over the legal details with you, so you know what you agree to.
- The lender shows you exactly how the loan will grow over time and how it affects your home’s value.
Why Busting These Myths Matters
Lifetime mortgages can be a great way to unlock some of your home’s value without having to sell it. But if you believe the myths, you might miss out on something that could make your life easier in retirement.
Whether it’s paying off debts, helping family, or just enjoying more financial freedom, a lifetime mortgage can be a useful tool. Just make sure to get proper advice and choose a plan that suits your needs.
A lifetime mortgage isn’t for everyone though, and that’s why clear guidance is essential. Our trusted partners at the UK Mortgage Centre make it easy, empowering you with the information and the choice.
Ready to explore what a lifetime mortgage could mean for you? Click here to fill out the form you need to get started.
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