Customer who had an equity release for many years at a very high rate
Working as an equity release specialist adviser is always so rewarding.
In these challenging times the focus of my advice is far more around helping people in distressing financial situations to provide them with peace of mind rather than releasing monies from their home to fund that trip of a lifetime!
I will be publishing a series of real-life case studies of some of the people I have advised over the last year, where a Lifetime Mortgage was the most suitable solution to meet their needs.
I was approached by a lady and her daughter who were sorting out their financial affairs following the death of her Husband some months earlier.
They had taken out an Equity Release policy over ten years ago, when her husband was alive, to enable him to retire.
At that time, the market was very different with none of the safeguards that are standard in today’s products.
At that time rates were high compared to today’s market and at the time they fixed their rate at nearly 7%. Due to affordability at the time they opted to make no payments to cover the monthly interest.
As I am sure you can imagine the effect of interest compounding at that rate and over that duration created a sizable debt which was far more than the original sum borrowed.
What is more, these days there are protections and guarantees in place with lenders such as a no negative Equity Guarantee which safeguards the borrower who is not servicing the interest. Compound interest, also known as a “roll up “, means the debt growing to such an extent over a long period of time that the debt could be more than the property value.
The products available today are far more sophisticated and flexible to meet the needs of a wide range of customer situations including various guarantees that can be built in to protect this situation but also to have the opportunity to safeguard a proportion of the house value to pass to your beneficiaries.
I was able to provide the customer with a rate of interest of just over 3%. Whilst this was still without the customer servicing the monthly interest costs. This had the effect of it taking 15 years of interest rollup to hit the same levels on annual interest they were currently paying with their existing arrangement therefore protecting their home from the erosion of any equity remaining.
Just as importantly the product had the no negative equity guarantee lacking with their original borrowing safeguarding their situation for the future.
This of course provided them with tremendous peace of mind and protected their position for the future.
EQUITY RELEASE WILL REDUCE THE VALUE OF YOUR ESTATE AND CAN AFFECT YOUR ELIGIBILITY FOR MEANS TESTED BENEFITS. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
Can Asquith Financial Services help you?
For more information, please contact us on -
Tel 01206 250681 or 07500969167
www.asquithfinancialservices.co.uk
Working as an equity release specialist adviser is always so rewarding.
In these challenging times the focus of my advice is far more around helping people in distressing financial situations to provide them with peace of mind rather than releasing monies from their home to fund that trip of a lifetime!
I will be publishing a series of real-life case studies of some of the people I have advised over the last year, where a Lifetime Mortgage was the most suitable solution to meet their needs.
I was approached by a lady and her daughter who were sorting out their financial affairs following the death of her Husband some months earlier.
They had taken out an Equity Release policy over ten years ago, when her husband was alive, to enable him to retire.
At that time, the market was very different with none of the safeguards that are standard in today’s products.
At that time rates were high compared to today’s market and at the time they fixed their rate at nearly 7%. Due to affordability at the time they opted to make no payments to cover the monthly interest.
As I am sure you can imagine the effect of interest compounding at that rate and over that duration created a sizable debt which was far more than the original sum borrowed.
What is more, these days there are protections and guarantees in place with lenders such as a no negative Equity Guarantee which safeguards the borrower who is not servicing the interest. Compound interest, also known as a “roll up “, means the debt growing to such an extent over a long period of time that the debt could be more than the property value.
The products available today are far more sophisticated and flexible to meet the needs of a wide range of customer situations including various guarantees that can be built in to protect this situation but also to have the opportunity to safeguard a proportion of the house value to pass to your beneficiaries.
I was able to provide the customer with a rate of interest of just over 3%. Whilst this was still without the customer servicing the monthly interest costs. This had the effect of it taking 15 years of interest rollup to hit the same levels on annual interest they were currently paying with their existing arrangement therefore protecting their home from the erosion of any equity remaining.
Just as importantly the product had the no negative equity guarantee lacking with their original borrowing safeguarding their situation for the future.
This of course provided them with tremendous peace of mind and protected their position for the future.
EQUITY RELEASE WILL REDUCE THE VALUE OF YOUR ESTATE AND CAN AFFECT YOUR ELIGIBILITY FOR MEANS TESTED BENEFITS. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
Can Asquith Financial Services help you?
For more information, please contact us on -
Tel 01206 250681 or 07500969167
www.asquithfinancialservices.co.uk
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