An enhanced lifetime mortgage is the best equity release plan if you’d like to maximise how much you can borrow. Here, we’ve delved into how it works, the benefits and help you decide whether it’s the right product for you.
An enhanced lifetime mortgage is an equity release product that gives you access to more funds compared with other standard lifetime mortgages. The amount you can release, however, depends on your health. Typically, the worse your health is, the more you can borrow.
The lender will take into account your health and the value of your property, unlike other plans where age and property value are the main driving factors. Your eligibility for this type of plan will depend on your medical history, which the mortgage lender will check.
Questions asked are almost similar to those of a life insurance plan, including:
The lender will consider the value of your property and your age, after which they will enhance the amount you can borrow depending on your health questionnaire answers. To qualify for a typical lifetime mortgage, you need to be at least 55 years old and have a property value of at least £70,000.
If you’re at retirement age and you’re suffering from a critical illness, or you’re in poor health, you shouldn’t have to worry about money. An enhanced lifetime mortgage can give you access to extra funds to cover medical expenses and other costs.
Here’s an overview of the main benefits of enhanced lifetime mortgages:
The amount available to you will depend on your property’s value, age, and health condition. The best way to get an exact quote is to use a comparison engine online to get quotes from various lenders.
To give you a better idea of the costs involved, we’ve put together an example quote:
Note that your rates will likely be different, and the amount available to you will depend on the value of your property.
We compare plans from the leading equity release providers
There are plenty of advantages to taking out an enhanced lifetime mortgage. It gives applicants with poor health access to funds without the need for a medical. However, there are also some factors that you should take into account before making a decision.
It’s always best to discuss the plan thoroughly with an advisor before going ahead.
You might be wondering if an enhanced lifetime mortgage is available to you if you still have an outstanding balance to pay on your standard mortgage. The good news is that, yes, you can apply and get approval. However, the lender will use part of the funds you release from the lifetime mortgage plan to clear your existing mortgage.
So, if you still have a considerable amount left to pay, it could leave you with a much lower lump sum of cash. So it’s best to consider all your options before deciding whether a lifetime mortgage is the right loan tool for you.
There are situations where your circumstances change, and you need to exit the lifetime mortgage plan early. If this is the case, you can leave your plan before it runs its course. However, the lender will charge you an early repayment fee. You should consider the cost of the fee before deciding since it might not be worth your while to exit your plan.
Like taking out a standard mortgage for your property, getting the best rates is all down to research and perseverance. It would help if you used a reputable broker to search the market for good deals and use a comparison engine to show you rates from different lenders.
Make sure you don’t opt for the first rate offer and compare multiple providers before choosing one.
If you’re in poor health, an enhanced lifetime mortgage can be used as a tool to ensure that you can meet your retirement expenses. This is especially true if you have expensive hospital fees and medication to pay for due to your poor health. An enhanced lifetime mortgage can give you peace of mind and act as a layer of protection during the last period of your life.
On the other hand, if you aren’t in poor health but you’re looking to access the level of funds available through an enhanced plan, you probably won’t be approved. You must meet certain health conditions to be eligible for the plan.