With a capital release plan approved by the Equity Release Council, you can make a partial or full repayment whenever you want. Some plans allow you to make payments free of charge; however, some plans require you to pay additional charges. If you want, yes, you can, absolutely. However, it is important to reiterate how a lifetime mortgage with capital release is designed to remain in effect for the rest of your life or as long as your health allows you to continue living in your primary residence.
A capital release mortgage involves a lender giving you cash in exchange for a portion of the proceeds from the sale of your property later on. But unlike a traditional mortgage, which you pay within a certain period of time, a capital release loan is not settled until you leave your home. You can pay for the capital release ahead of time. However, depending on the lender and the type of lifetime mortgage you have, early repayment fees may apply.
Some equity release providers allow you to make early repayments after a fixed number of years. Others allow you to repay a percentage of the loan each year. Some equity release providers also offer a non-negative capital guarantee. This means that the money you will eventually have to pay back will never exceed the total value of your home.
You won't have to pay the money you returned until the last surviving borrower dies or moves out of the home for long-term care. Usually, the loan is amortized with the sale of your home. Yes, you can pay the capital release ahead of time and you can make a partial or full refund whenever you want. However, it is important to note that early reimbursement fees may apply.
Part of the appeal is that these schemes are increasingly flexible and, unlike a traditional mortgage or a specialized product such as a retirement interest only mortgage (RIO), there are no mandatory payments to free up capital. Look for the Equity Release Council approval mark to ensure you are using a trusted provider. Your estate is responsible for paying the full balance due, and most lifetime mortgages are repaid from the proceeds from the sale of your property. You should get advice on whether capital release is right for you and make sure you understand how these products will impact what you can leave your loved ones.
Don't worry, no matter what type of plan you have, they will be able to keep the property, as long as they can repay the money owed to the equity release lender. If you have a complaint about a financial advisor or capital release provider, ask for a copy of their complaints procedure. You can accept the money you release as a lump sum or, in several smaller amounts, or as a combination of both. In that case, the capital release lender will not charge either its estate or its beneficiaries another penny (provided that the property is sold at market value).
If you haven't paid your current mortgage yet, your lender may agree to extend your mortgage and free you up some more money. Their goal is to provide you with information and protection if you are considering participating in a capital release plan. The Equity Release Council, which is the industry's trade body, insists that all lifetime mortgages include a “non-negative equity guarantee.” If you are considering canceling your capital release ahead of time, talk to us for advice on releasing capital and make sure you get the plan that best suits your needs.