Equity release advisers have to talk to lots of older clients facing financial adversity in later years of life. Most of the older people are left with many years of life and unwilling to relinquish the lifestyle they are used to.
Some of the people have taken annuities and gain retirement income from it. But, as the fixed annuity terms ends, they are again left on own. It causes a drastic fall in their retirement income.
Equity release advisers have to deal with many such cases. There could be another condition when the couple has used up entire retirement income and virtually left with nothing to depend for rest of their life. It forces them to severely curtail their lifestyle.
But they are not ready to accept any kind of changes in their lifestyle and way of living. Going on a cruise, shopping and other things have become part and parcel of their life and no matter what it can’t be detached from their lifestyle. Many senior citizens are even ready to pay up to £5,000 per year on cruise holidays.
It’s typical to notice that after supporting children financially throughout their life and having worked hard for entire life, a septuagenarian couple will take coming years as their time. They want to live these years at the fullest.
Most couples have certain medical conditions as well. The biggest worry for them is to find the resources to fund their lifestyle as well as medical bills.
Solution Lies with Equity Release
Under such precarious circumstances, they can be offered equity release solutions. Most couples own the houses having greater value in long term. It’s a surety that these houses have added lots of equity over the years. But some of them have interest only mortgages, about to attain maturity in recent future.
Equity release could provide all the solutions, whether it’s about lifestyle maintenance, footing medical bills or repaying existing mortgages.
Suppose a couple owns a house that worth £325,000 but they also have an interest-only loan of £30,324. They need to repay £125 per month and the loan is on the verge of maturity in couple of years.
If they take drawdown lifetime mortgage at 33 percent valuation rate, they can repay the mortgage and still left with £77,000 that can be withdrawn as and when they need the money.
If they opt for rolled up lifetime mortgage, additional expenditure of £125 can be saved and they will have a lesser deficit to add up to.
However, it’s natural and obvious for them to consider other alternatives, such as downsizing and renting the room, as well.
As a whole, equity release is not only about managing the income shortfall but also the comfort and luxury of life in your best years.