Your daughter came out to you about five years ago, but since your customs and religious beliefs shun away non-binary genders, your relationship with her ceased to exist. With years passing and with your heart disease becoming worse, you want to mend your relationship now. You’ve also heard that there’ll be a pride march in New York this year and she’s one of the organizers, so you’re thinking about surprising her.
However, you don’t have the funds to pay for your ticket and a room in a luxurious hotel. Well, since your home is worth more than €70,000 and you’re aged 58, you can get some cash by unlocking the equity tied up in your estate. Since you also have a medical condition, you can easily apply for the equity release UK plan, preferably the enhanced lifetime mortgage plan and get more money than a client with no medical condition.
What’s the Enhanced Lifetime Mortgage?
The enhanced lifetime mortgage, impaired scheme or the ill-health equity release1 loan is the most recent invention in the equity release market. It enables you to unlock more capital from the equity tied up in your estate than the standard equity release mortgage. Typically, the plan provider provides you with the plan on either a lump sum or drawdown2 basis.
Just like the enhanced annuity3schemes, this lifetime mortgage scheme also offers you a favourable lump sum and the more severe your health, the more capital you can expect to receive. The principle behind the enhancement plan is a lower life expectancy.
You receive a tax-free cash lump sum from the outset, and you don’t have to make any monthly payments. The amount of capital you release, however, with time, attracts a fixed duration interest rate which compounds over the life of the loan.
When the last homeowner passes away or moves into long-term care, the lender will put up the house for sale and use the proceeds to pay off the mortgage, and the remaining proceeds will go to the heirs of the estate.
Unlike other mortgage plans, with the enhanced lifetime mortgage, your health history will determine the amount you get. The lender will provide you with an honest health and lifestyle questionnaire that’ll consider the following (this list isn’t limited to these conditions only):
- If you’re a cigarette or rolled tobacco smoker
- Your body mass index (BMI)
- If you’re prone to high blood pressure
- Medical issues like angina4, heart attack, strokes, among others
- If you have been diagnosed with cancer
- If you suffer from diabetes
- If you have multiple sclerosis
- If you have Parkinson’s disease
What makes this scheme worthwhile is that it not only allows you to unlock more cash than the standard equity release plans but also features lower interest rates. It offers you a more significant lump sum than the conventional equity release schemes. It also provides you with the ‘no negative equity guarantee’ 5that safeguards your family from paying more than the value of your home and also enables you to transfer your scheme to another estate without incurring any penalties.
So, you don’t have to worry about your trip to New York. With this fantastic equity release plan, you can make your plans, book that hotel room you want and fly to the pride festival to surprise your daughter. In any case, the experts always stressed that it’s better to be late than never. So, try to make amends right now because the future is never predictable!