Capital Raising in Retirement

Posted on 2 February 2011 by Clarence


I am in my late 50's and retired, i have paid off my mortgage but really need to raise an extra £20-30,000. With my age what sort of mortgage length in terms of years etc would be available to me? I have a pension at the moment. I am also considering some type of equity release schemes as I would like to stay in my home. Any advice is really appreciated.

Clarence,

The majority of Lenders are willing to consider a mortgage up to the age of 75. You need to think very carefully about whether this is right for you as it only gives you around 15 years to repay the debt. Unless you have investments set aside, I would recommend that you take a repayment mortgage and repay the capital over the term of the loan. The alternative to this is an interest only where the debt is repaid at the end of the term and you could find yourself in the position of having to sell your property when you don't want to.

The alternative to a normal mortgage is an equity release scheme. There are various different types available to you and you will need to take expert advice but they will all leave you with a reduced estate when you die and you should take independent legal advice as well as consulting any future beneficiaries before taking one of these loans.

I recommend that you speak to an independent mortgage adviser about the possibility of a 'normal' mortgage and they will also be able to refer you to an Equity Release specialist.

Peter

Answers provided in response to Ask the experts are based on the information provided and do not constitute advice under the Financial Services & Markets Act. They reflect the personal views of the authors and do not necessarily represent the views, positions, strategies or opinions of John Charcol. All comments are made in good faith, and John Charcol will not accept liability for them.

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