And enhanced lifetime mortgage scheme provides some substantial benefits, if you are able to qualify. If you are able to attain an enhanced lifetime mortgage, you will likely enjoy a lower interest rate as well as a larger equity release.
Overall, this product is available based on personal health conditions and records. It provides the maximum equity release depending upon the answers you give to standardized health questions. Generally speaking, if you are in poorer health, you are able to borrow more money.
How to Qualify for an Enhanced Lifetime Mortgage
Your medical records will help determine your approval odds for an enhanced lifetime mortgage. The equity release provider will take your records into account when determining if your life expectancy is shorter given poor health or lifestyle choices. Some medical conditions and lifestyle choices that might help you qualify include the following:
– Medical problems including cancer, previous heart attacks, stroke, or angina
– High blood pressure
– Parkinson’s disease
– Multiple sclerosis
– Taking prescription medications
Usually the more severe the health conditions, the more money you are able to receive. If you had to retire early due to poor health, that can mean receiving more cash as well. The list above does not include every condition. Rather, the more severe your health conditions, the more likely you are to qualify for an enhanced lifetime mortgage.
For a definitive answer on whether you qualify for an enhanced lifetime mortgage use our free smartER research tool.
How much equity can be released?
Similar to other lifetime mortgage products, the overall value of your property and the age of the youngest homeowner are still used in determining your eligibility for an enhanced lifetime mortgage.
In addition to those factors, an enhanced lifetime mortgage also uses a ‘health and lifestyle’ questionnaire to determine eligibility. If you have any of the conditions listed on the questionnaire, the number and severity of each will be taken into consideration when determining the amount of equity you can release. The amount available as well as the applied interest rate differs by provider. However, all of them base their determinations on the premise that your life expectancy is shorter given your conditions.
There are several benefits to an enhanced lifetime mortgage scheme:
– You will likely receive a bigger lump sum payment and a lower interest rate than you would if you took out a standard lifetime mortgage product.
– You benefit from having poor health or a poor lifestyle.
– You may be able to qualify for a drawdown scheme which would allow you to withdraw money in stages instead of all at one time.
– You do not need to undergo a medical examination. Instead, your medical records are used to verify your conditions.
– You are still able to benefit from the ‘no negative equity’ guarantee.
– The questionnaire you need to fill out is very self-explanatory and simple to fill out.
Similar to all other products, there are some risks to an enhanced lifetime mortgage scheme:
– You may not be able to leave behind any inheritance to your loved ones, given the larger equity release.
– You may have a much higher interest rate than you would with a standard product.
– You could impact your means-tested benefits.
– It may take longer to set up your product, given that medical records need to be verified.
Where can I get an enhanced lifetime mortgage?
Not every provider offers an enhanced lifetime mortgage. In fact, the number of those that offer it is quite limited.
The three companies that offer the product are More2Life, Aviva, and Just Retirement. With each of these providers, the amount offered with an enhanced lifetime mortgage is more than with a standard scheme. That said, each provider has their own variation:
– More2Life has a cash reserve available with their enhanced product. This allows for future withdrawals, if needed.
– Aviva provides a lower interest rate if the maximum amount allowed isn’t taken.
– Just Retirement has a questionnaire that includes some conditions the other providers do not consider.
With each of these providers, you can expect that the information you provide will be verified with your medical doctor or through a medical report.
As is the case with all lifetime mortgage products, it is really crucial to get advice on whether or not an enhanced lifetime mortgage is the right fit for your particular needs. Reaching out to a trusted equity release adviser can ensure you are weighing all of the benefits and risks of an enhanced lifetime mortgage.