If you have reached retirement and concerned about repaying an interest only mortgage - read on because we have welcome news.
A number of lenders are now offering retirement interest-only mortgages where the sale of the home becomes the means of repaying the capital debt.
These mortgages offer an alternative to the considerably expensive equity release products that have proved to be a popular means of raising capital or income for home owners over 55.
At Buckingham James Financial Services, we’ve recently seen an increasing number of lenders lining up to release this new style of home loan that allows older borrowers to take out interest-only mortgages.
Effectively this method will help retired borrowers who may be stuck on interest only loans with a way to remortgage and using the sale of their property as a means of repaying the debt.
Retirement Interest Only loans can also be used to boost finances, pass money on to children or grandchildren, or simply remortgage the existing debt that would otherwise have no means of capital repayment.
This will be welcome relief and provide a lifeline to the many thousands of older borrowers stuck in existing interest-only mortgages that are coming to the end of their term.
Retirement Interest Only (RIO) mortgages have only recently been made available since the FCA relaxed the lending criteria rules that govern how lenders provide mortgage finance.
This type of arrangement was put on hold several years ago when the financial authorities introduced stricter new lending rules following the banking crisis.
The rules stopped borrowers from getting an interest-only mortgage if they planned to use their property to repay it when they died or moved into care.
If a RIO mortgage is something you would like to consider, get in touch with us today for full details and a look at all the options available for you at this crucial time.