By Dave Kavanagh
There are many situations where homeowners have limited or no savings but may have requirements that need funding, even though their income does not permit them to commit to unaffordable, regular repayments. Imagine you’ve worked diligently to pay off a substantial portion or all of your mortgage, and you find yourself in need of additional funds due to unforeseen circumstances. A lifetime mortgage allows you to tap into this equity without selling your home. The borrowed amount, along with accrued interest, is typically repaid when the property is sold or when the last borrower passes away or moves into long-term care, so there are no regular repayments to make. There are, of course, reasons why they may not be appropriate for everyone’s circumstances. Some of the benefits include access to funds, whether it is to cover medical expenses, modifications to your home, to assist children in purchasing their own home, or any other urgent needs, no monthly repayments and ownership of your property is retained. Some of the factors to consider, include interest accrual, as interest is added to the borrowed amount over time, this may reduce the equity remaining in your property. It can reduce the value of your estate, potentially affecting any inheritance you leave behind. Financial implications: it’s crucial to understand the impact of a lifetime mortgage on your overall financial situation, including potential entitlements to state benefits. The amount that can be advanced will depend on the ages of the homeowners and the value of the property (minimum age is 60). Choosing a lifetime mortgage is a decision that should be made carefully, taking into account your unique circumstances, goals, and needs, including situations where there may be still some of your children living at home and you may have planned to leave them the home to live in after your passing. For further information on lifetime mortgages, you can email email@example.com and put “lifetime mortgages” in the subject line.
Dave Kavanagh QFA has been advising people financially for over 25 years. For quotes or information (with no cost or obligation) he can be contacted by emailing Dave at firstname.lastname@example.org or use the contact form on financialcompanion.ie or @Davekav_advice on Twitter and Instagram. Combined with his previous role of gym/nutrition adviser, he regularly gives talks and workshops at seminars and events for groups, companies and government departments on financial well being, positivity and motivation. As heard on RTE 2FM , LMFM and TV3.