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Equity Release enables 71 year old lady to transforms her quality of life

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Raising funds to buy partner out

This week I was able to advise one of our existing clients.

Four years ago I was referred a lovely client from an Independent Financial Advisor I work closely with.

Her client was 67 years old and had unfortunately just split up with her partner. She needed to raise £50,000 to pay him so that he could get another place to live and she could remain in her home. My client had heard of Equity Release mortgages but was nervous about taking it out as she had heard bad comments about it. I will call her Mrs B.

When I asked Mrs B what these were, her main concern was that the ‘compound interest’ could roll up and leave her with a huge debt so she would be unable to leave any money to her children. I explained that she was able to pay the interest each month on a Lifetime Mortgage (the main type of Equity Release) to prevent the debt from increasing.

Is Equity Release the right option?

During her Fact Find meeting, we discussed the fact that Mrs B would like to move closer to her children, however this would not be for another two years. Her son and his partner attended the meeting to ensure that her family was supporting her and that they were all aware of the options available.

As Mrs B did not want to move for another two years, rather than continue to explore Lifetime Mortgages, we decided to complete a Residential Mortgage over a two year term. This meant that Mrs B could pay her ex-husband the money she needed to raise, and repay this on an interest only basis to keep the monthly payment low. Although Lifetime Mortgages do offer good portability to move to a new home, Mrs B’s particular situation meant that a Residential Mortgage was the best advice at that time.

Client review creates solution

Two years later, I reviewed Mrs B’s mortgage situation, and discovered that she was still keen to move home but was struggling to find anywhere within her price range that she liked as much as her current home. We agreed that we would review her situation in another two years, or if Mrs B found a property in the next two years, she would contact me.

Fast forward to August 2021 and we agreed to have another biannual review. Mrs B attended with her son and his partner, and we had a really good meeting during which we explored all options available.

There were no properties that Mrs wanted to move to and she explained that the last two years had been tough for her. Mrs B wanted to repay the mortgage but no be committed to making monthly payments. Mrs B wanted to start going out more with family friends for meals and short holidays, as well as make improvements to her home and take some foreign holidays. Her friend had taken Equity Release two years ago and she was jealous of all the holidays he had been enjoying!

Equity Release now the correct option

We were able to remortgage her Residential Mortgage to a Lifetime Mortgage which she was not obligated to make monthly payments towards, but could if she decided to. This mortgage could then repay her Residential Mortgage. Mrs B also wanted a ‘Drawdown facility’ to receive further funds over the next few years as and when she wanted them

Mrs B has been a client for four years. Equity Release was not right for her four years ago, however since then, her situation had changed, she had researched Equity Release, spoken to friends who had taken it and discussed it with her family.

At Ocean, this is our favourite type of case. A client who has an initial problem that needs solving, who then becomes a long term client. We can then work with them during their biannual reviews to see how their situation has changed and give them the appropriate mortgage advice.

Ocean Mortgages Ltd is authorised and regulated by the Financial Conduct Authority.

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Equity Release enables 71 year old lady to transforms her quality of life