By John Cossons, an Equity Release adviser.
Below is a true recent retirement case study that I would like to share with you.
A single retired 71-year-old client of mine had sold her property and was currently living with a friend. She was looking for a new house closer to her family.
In an ideal world, she would have loved to buy a retirement bungalow. However, as bungalows are in high demand in this area and command a high price, she did not have enough capital remaining to do this. Instead, she was looking for a terraced house within her budget and finding even this troublesome as she only had £120,000 cash available from the sale of her property but required at least £140,000 for a terraced house. Additionally, this was not in the area she was after. Through an estate agent, she was introduced to me to see if I could help her raise the additional £20,000 as she had no other savings or means of raising the funds. She has a modest income of just £9,000 per year from state and small private pensions and has no spare money after paying for essentials.
The retirement solution
After our initial discussion, we found that not only could she raise the money requested but that she could look at the type of bungalow that she really wanted. Armed with this information, a short while later found a fabulous bungalow priced at £155,000. The property required redecorating and bringing up to date and once the work is completed will be worth around £175,000.
Setting aside £10,000 of her available capital for the renovation work, she used the remaining £110,000 and a £45,000 Equity Release lifetime mortgage to purchase the property. Electing to roll up the interest payments so that she did not have the monthly commitment of this. She also has the peace of mind that she has a further £4000 available to her as a drawdown facility should the renovation costs run over.
My client was initially concerned that if there were a slump in property prices in the future she may not be in a position to leave an inheritance to her next of kin. However, the lifetime mortgage that was recommended allowed her to leave her next of kin a guaranteed minimum of 10% of the sale price. 10% now of a more expensive property in a more desirable area when she dies or goes into long-term care.
With the help of Tina and Megan from our client support, the time taken from an application, to offer was only 12 days. I am glad to say she has completed the purchase. And, is now choosing her new kitchen and planning the redecoration to her own tastes and has regained her independence.
How Equity Release Northampton can help you in retirement?
If you are considering Equity Release in retirement and want to know more then why not arrange a meeting. The meetings are free and without obligation. Meetings can be at your home, in one of our meeting rooms in Northampton or at our head office in Kettering. They can be arranged at a time that is convenient for you. This includes evenings and weekends.
Our fee of £895.00 is only payable if you take an Equity Release plan with us. Our fee is paid by your solicitor directly to us from the funds released. Additionally, you have the peace of mind that we are members of “The Equity Release Council”.
We will always provide you with a free personal illustration.
Why not contact us today to arrange a free no obligations meeting.
These products are lifetime mortgages or home reversion plans. Equity released from your home will be secured against it.