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How does a health condition affect equity release?

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Michelle Monck

Consumer Finance Expert
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At a glance

  • A health condition could make you eligible to borrow more using an enhanced lifetime mortgage
  • You will usually be asked to complete a simple health questionnaire
  • A full medical is not required for equity release

A lifetime mortgage is the most common type of equity release. This is a form of borrowing secured against your home and provides a tax-free cash lump sum. It is available only to those aged 55 years and over. A lifetime mortgage allows you to remain in your home without the need to repay the loan until you go into either go into long term care or pass away.

How much could you release using a lifetime mortgage?

The maximum amount of cash a homeowner can release using a lifetime mortgage depends on their age, personal circumstances, property value and their health. When applying for equity release the lender will agree the maximum amount you can drawdown. This amount is also expressed as the maximum loan-to-value that you can borrow.

Speak to an expert equity release adviser today

 

Moneyfactscompare.co.uk's preferred equity release adviser is Mortgage Advice Bureau Later Life

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Mortgage Advice Bureau Later Life offers plans from a panel of lenders. It only offers plans that meet the Equity Release Council's standards to give you extra protection.

Speak to an equity release specialist.

Call 0800 178 7901 or calculate how much you could release.

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Unless you decide to go ahead, the service is completely free of charge, as the fixed advice fee of £1,295 would only be payable on completion of a plan.

What is an enhanced lifetime mortgage and how do they work?

Those with health conditions may find they can increase the maximum LTV available to them by using an ‘enhanced lifetime mortgage.’ An enhanced lifetime mortgage uplifts the maximum LTV available and therefore also the total amount the borrower can drawdown. The extent of these uplifts depends upon the nature of the medical conditions and the borrower’s age.

Enhanced lifetime mortgages usually have higher interest rates compared to traditional lifetime mortgages.

A good equity release adviser will help those that have a medical condition to assess if an enhanced lifetime mortgage and the higher interest costs this might incur are worth the additional uplift in cash released.

Should I disclose my health conditions when applying for equity release?

Lenders usually ask for information about a borrowers’ state of health. Answering these questions honestly is important to make sure you do not breach any conditions of the lifetime mortgage and could help you if you need to access a greater amount of borrowing using an enhanced lifetime mortgage.

Will a medical be required for equity release?

Borrowers are not asked to have a full medical to be eligible for an enhanced lifetime mortgage. Mostly borrowers are asked to complete a simple health questionnaire. This allows the adviser to determine whether an enhanced lifetime mortgage is suitable. These questions should be answered honestly as the lender may write to the borrower’s doctor to confirm the details are accurate.

Find out how much money you could release from your home

Go to the equity release calculator provided by MAB Later Life and see how much money you could release from your home.

Compare equity release interest rates

Moneyfactscompare.co.uk publishes the best equity release interest rates each month. These can be a useful guide for those wanting to find out more about equity release.

Disclaimer: This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.

woman sat in chair holding a walking stick

At a glance

  • A health condition could make you eligible to borrow more using an enhanced lifetime mortgage
  • You will usually be asked to complete a simple health questionnaire
  • A full medical is not required for equity release

Moneyfactscompare.co.uk will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by Moneyfactscompare.co.uk will always be from news@moneyfacts-news.co.uk. Be ScamSmart.

Moneyfactscompare.co.uk will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by Moneyfactscompare.co.uk will always be from news@moneyfacts-news.co.uk. Be ScamSmart.