When Roger had to take early retirement due to ill health, he and Betty were unprepared for the reduction to their household income. Initially they relied on their credit card and overdraft to help make up the shortfall each month, but once they exhausted all their available lines of credit they started to fall behind on their priority expenditure.
By the time they were referred to us by one of our partners in January 2015, they were two months in arrears on their mortgage, behind on the monthly repayments to their credit card and had agreed a reduced payment on their Hire Purchase agreement.
Roger and Betty completed an appointment with one of our Debt Advisors, which showed they didn’t have enough money coming in each month to cover even their most basic living expenses. Taking into account their ages of 64 and 76, and their low outstanding mortgage of £20,000 against a property value of £150,000, our Debt Advisor recommended they look into equity release.
Roger and Betty agreed to be referred through to StepChange Financial Solutions, the UK’s only free, charity-operated mortgage and equity release advice service. The advisor fully explored their current circumstances and future aspirations. This included a discussion on potential life expectancy, their monthly budget, inheritance provisions for their children and possible funding requirements for future property maintenance.
Following the assessment process, the advisor recommended a lifetime mortgage. He explained that although this type of equity release is more expensive than a regular mortgage, because the mortgage and accrued interest would only be repaid following the sale of their home or a move into permanent long-term care, it offered sufficient funds to repay their existing debts with no monthly repayments required. It also offered a drawdown facility that they could call on in the future, if they needed to carry out any maintenance or adaptations to their property.
After carefully considering all the factors involved and discussing it with their children, Roger and Betty proceeded with the application, through to successful completion. They have now repaid their existing mortgage and all their unsecured debts, and instead of worrying about how to make ends meet, they’re now able to enjoy their retirement, secure in their family home.
*Names have been changed to protect the clients’ identities