Equity Release Later Life Divorce

Geoff, 65, and Jane, 63 are both retired, but have decided to go their separate ways

They would like:

  • for Jane to stay in the family home so their grandchildren can continue to stay over
  • more money to help them pay for the immediate costs of a divorce
  • to fund enough money for Geoff to move out and afford his own place

After 40 years of marriage Geoff and Jane have mutually decided to divorce, and are looking for the best way to move forward. They have two grandchildren, which Jane looks after regularly so her daughter can work and save on childcare.

Geoff has agreed that Jane can remain in the family home. His pension is enough for him to live a comfortable day-to-day life, but he needs some additional money to cover the immediate costs of the divorce and move out.

Jane receives a moderate pension, but has no savings or investments to speak of. She’s worried she won’t have enough income until she gets her share of the divorce settlement.

Their home in Thatcham, which they own outright, is worth £400,000. They have both considered downsizing but want to avoid doubling their moving costs and causing any emotional stress by selling the family home.

One option they consider is to release a lump sum of money from the value of the family home to facilitate the divorce, using a Lifetime Mortgage.

Based on their circumstances, Geoff and Jane release the maximum loan possible as an initial advance using a Lifetime Mortgage.

Overall, based on Geoff and Jane’s ages and property value they can:-

  • Access up to £144,000
  • Receive this maximum loan as a lump sum
  • Make no monthly payments
Equity release 2

Benefits

The lifetime mortgage allows Geoff and Jane to unlock some of the equity from their property without having to sell it. This avoids paying additional moving costs and the upheaval of losing the family home.

A lifetime mortgage generally completes within 8 weeks or so whereas selling their home could take months.

It can help relieve the financial stress at an expensive and emotionally difficult time for both parties.

Jane can continue to care for her grandchildren and remain in the family home. Should she wish to move and downsize once they’ve grown up, she can take the lifetime mortgage with her, subject to the terms and conditions of the lender.

Geoff could use the money to buy an apartment or use it as additional income to pay rent on a property

Risks

As specialists in Equity Release, we take time to explain the risks involved with the product before Geoff and Jane decide if it is right for them.

  • A lifetime mortgage is a loan secured against their home
  • Interest is charged on a compounding basis, which means interest is charged on the loan plus any interest already added.
  • A lifetime mortgage will reduce any inheritance they leave from the property
  • There may be cheaper ways for Geoff and Jane to borrow money

This example is for illustration purposes, if you’d like to learn more or discuss your own situation in complete confidence and with no obligation, please call us on 0118 4668712 or send us an enquiry via email to info@themoneyguardian.co.uk

Equity release may involve a lifetime mortgage which is secured against your property or a home reversion plan which requires the sale of property for a discounted price. To understand the features and risks, ask for a personalised illustration.

The Money Guardian Ltd (FCA 797161) is an Appointed Representative of New Leaf Distribution Ltd which is Authorised and regulated by the Financial Conduct Authority. Number 460421.