Releasing Funds for Repairs and Debt Management

The client

• Gavin, aged 68 & Carmen*, aged 60 / Retired & Part-time worker

• Married couple, single application

• Current house value: £1.1m

• Requires: £99,000

• Maximum loan-to-value: 26.5%, drawdown

Gavin and Carmen’s Story

Gavin and Carmen have been married for five years and live together in Gavin’s house, which he owns. Carmen is not on the title of deeds as she moved in after they were married.

Gavin is now retired, and while Carmen works part-time, her income isn’t enough to keep up with their lifestyle. Gavin already has some credit card debt which he has, so far, managed the monthly repayments, but as he has recently retired, its more difficult to clear the debt.

Lending Criteria Obstacles

A family friend who is a Wealth Manager suggested he speak with an Equity Release Adviser. On meeting with the adviser at their property, he noticed an excessive number of items stored, restricting access to certain rooms. The equity release adviser recommended that before a valuation takes place, they should try to clear any unnecessary clutter from the property.

Lifetime Mortgage Requirements

As his wife isn’t named on the property deeds, Gavin can only obtain a lifetime mortgage as a single applicant, which is exclusively in his name. The adviser talks them through their options, as a single applicant, should Gavin die before his wife or go into long-term care then Carmen would need to leave the property for it to be sold to repay the lifetime mortgage. Alternatively, they can put the property into joint names and apply together. In this instance, they jointly decide to proceed with Gavin as a single applicant as Carmen has another property from a previous marriage that is currently rented out. Pure Retirement’s Sovereign lifetime mortgage allows a married couple to submit a single application. Gavin decides to release 9% loan-to-value, allowing him the option to release more in the future.

Gavin is advised to take a Pure Retirement Sovereign lifetime mortgage.

• Loan-to-value 9%.

• He releases £99,000 (Gavin could borrow up to £291,500 if he used the full LTV available).

• Gavin initially releases £30,000 to repair and modernise his property, and later draws an additional £18,000 to repay his credit card debts. The remaining £51,000 will be drawn-down evenly over 5 years to spend on holidays.

*Client names have been changed to provide anonymity. We cannot give any assurances that applications outside our lending criteria will be approved.