The short answer is that you can generally transfer a capital release mortgage to a new property. Your mortgage company will have criteria for your new home, which will be the same as if you took out the capital release mortgage as a new customer. In most cases, you'll simply transfer the loan from your old property to the new one, and the terms of the capital release plan will remain the same. If you have a lifetime mortgage and want to move to a property with a lower value, the lender may require a partial repayment of the loan to keep it within the loan limits at that time; however, the lender cannot impose any early repayment fees on you, which could be a feature of your plan.
Yes, you can move out of your house when you have a capital release. In most cases, you should be able to transfer your capital release debt to your new home, as long as your capital release provider is convinced that the property you are moving to offers sufficient security for the money you have borrowed. If you're moving to a home that's worth less than your current home, you may have to repay part of the loan plus interest. If your new property meets their lending criteria at that time and they agree that you can, then you'll be able to move out and take your lifetime mortgage with you when you leave.
For those who have a capital release mortgage in force, it is possible to switch to another product and another lender, just as they can remortgage their home in the traditional mortgage lending market. Popular among people over 55, capital release is a way to free up much-needed money to make home improvements, improve retirement, pay off mortgages and debts, or increase disposable income. Borrowers generally “amortize” their mortgages when they have to pay a large exit fee if they return the product early. The new property must also meet the current lending criteria.
If a property is unusual or may be more difficult to sell when you and your partner die, this can cause a problem. Sometimes, specialized nursing homes and sheltered housing may be considered outside the purview of some lenders. You may be allowed to move residential properties and carry the capital release plan with you so that the new property will guarantee it. However, your capital release plan may not be competitive, have a high interest rate, or may not be able to meet your future needs.
Older homeowners use capital release because they can access a significant amount of money without having to make monthly repayments. A lifetime mortgage is the most popular form of capital release and a loan secured against your property. It would be best if you discuss these factors with your stock issuance advisor to ensure that you take your preferences into account. Whether you're looking to move to a different location or downsize your home, the terms of the capital release plan will allow you to make the move.
If you're worried that your capital release request will be rejected, the best thing to do is get a free confidential quote. To understand all the features and risks of a stock issuance plan, request a custom illustration. Transferring your capital release plan to the new property follows a process similar to that of requesting capital release the first time. It's a requirement that you receive financial advice, so your first option should be to talk to a stock issuance advisor.
However, it's worth finding out if there's a better deal available if you were to switch capital release plans to another lender, as this could provide you with a lower interest rate or more flexible options than your current plan. Capital release may include a home reversal plan or a lifetime mortgage that is secured against your property. Transferring your capital release plan to a different property is broadly speaking similar to requesting a capital release in the first place. This is just one of several additional guarantees obtained when choosing a capital release company that is a member of the ERC.