Interest-only mortgage coming to an end? Equity Release could help pay off your existing mortgage

If you do have an interest-only mortgage hopefully you have worked out a plan to pay off the capital at the end of the mortgage term. These may include:

• Cash in savings accounts or cash ISAs
• Stocks and Shares ISAs
• Shares, endowment policies or unit trusts
• Pensions
• Other assets

It is important that you keep track of these investments to ensure that when your mortgage comes to term you have the financial means to pay back the original loan amount. If you have an approved repayment plan in place to pay back the original loan, then your repayment facilities may be enough.

But what can you do if you do not have a plan to pay back the original loan? Firstly, do not panic – there are several options that can be considered.

1. Add up any savings that you could use to start to reduce the original loan. Contact your lender to ask about making overpayments.
2. Ask your lender about switching to a capital and interest mortgage.
3. Ask your lender about switching to part repayment and part interest- only mortgage
4. Extend the term of your mortgage to give you more time to pay towards the original loan.
5. Use a monthly Budget planner to review how much spare cash you may have each month and start to re-budget your monthly expenses. Try www.moneyadviceservice.org.uk/budgetplanner

Always ask your lender about any fees involved when switching or amending your original mortgage product.

So, how could Equity Release help with paying back an interest-only mortgage?

Clients with interest-only mortgages could pay off their existing loan by taking out a Lifetime Mortgage, enabling them to stay in the home that they love.

So how does it work? It’s simple!

1. You own your home but your interest-only mortgage is coming to an end.

2. You talk to an Equity Release Specialist.

3. They recommend a Lifetime Mortgage to help release some of the cash from your home to repay the original mortgage loan.

4. You choose to pay monthly installments to repay the interest on your new Lifetime Mortgage OR…

5. … you choose to allow the interest to roll-up knowing there is a No Negative Equity Guarantee

Either way you can remain living comfortably in your own home until you or the last remaining person dies or enters long term residential care.

A Lifetime Mortgage – A popular choice

A lifetime mortgage, the most popular form of equity release, is a loan secured against your home.

If you would like to consider taking out a Lifetime mortgage you must be:

• Aged 55+
• Own your own home worth £70,000+
• Want to borrow a minimum of £10,000
• Live in the UK

If your interest-only mortgage is coming to an end, and you think that a Lifetime Mortgage may be right for you, contact Kevin Woods to discuss your situation in confidence, and without charge or obligation of any kind.

Source: www.moneyadviceservice.org.uk