You may be eligible for an enhanced lifetime mortgage, that allows you to release more money from your home, if you or your partner have certain health conditions.
Sometimes referred to as an impaired lifetime mortgage, these plans take your health and various lifestyle choices into account.
If you qualify for an enhanced lifetime mortgage you may be able to borrow more money or take out a plan at a lower rate of interest. Basically, the poorer your health, the more money you could release.
You can release equity from your home as a lump sum or draw it down as and when you need it.
The most important factor of a lifetime mortgage is the age of the applicants. The younger an applicant is, the longer their life expectancy. This is why we ask for the age of the youngest applicant, as the maximum loan to values and interest rates for the different plans are based on how long the lifetime mortgage facility could run for.
The different plans available, the loan to values they offer, together with the interest rate, are based on what the number crunchers have determined as our average life expectancy.
If the number crunchers suddenly said that they have miscalculated and we were all going to live longer than they had calculated, the plans would change and the loan to values will drop.
Similarly if they announced they were wrong and we were going to die sooner, the loan to values would increase.
Based on this, there is a group of people who are very overweight, smoke, have illnesses such as diabetes, Parkinson’s disease, cancer, and other mild to serious health conditions, who’s life expectancy is below average.
For people who qualify or are considered to be in this group, there are some different equity release plans, known as ‘enhanced plans’ that raise the loan to value.
You won’t need to undertake a medical to apply for an enhanced lifetime mortgage, you will just need to complete a questionnaire. In some cases, additional information will be requested from your GP. If you are a smoker there may be a requirement for you to undertake a test.
Most lender’s questionnaires will be simple to answer and will ask you questions such as:
Your GP may be asked to provide additional information so that the Lender has a clear understanding of your state of health. This means that we can then arrange the best available lifetime mortgage for you.
All lifetime mortgages are calculated based on the age of the youngest applicant and the valuation of your home. Where one of the applicants has a health issue a further calculation will be done to assess the amount of equity that can be released.
This will be based on your response to the questions on the health and lifestyle questionnaire.
The amount of enhancement applied to the lifetime mortgage will depend upon the severity and number of health conditions that you have. This will vary between lenders, who will base their calculations on their estimated life expectancy of the applicants.
At KIS Finance we will take the time to get to know you and understand your circumstances and requirements.
Using our experience and market knowledge, we will then provide you with information on the best options available to you to meet your needs.
We will support you through the whole process and will encourage you to involve your family in any discussions and keep them informed on the decisions that you make.
Last updated: 22 November 2023 | © KIS Bridging Loans 2024