The amout you can borrow will be based on:
- your home’s value
- your age and health
- our assessment of your life expectancy
For a joint application the amount you can borrow will be based on both applicants’ details.
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This is based on your answers to a short series of simple questions about your health and lifestyle, which our underwriters then use to assess the level of loan we can offer. People with more severe health conditions are likely to receive more than those with minor health problems.
If you do apply, we may ask your doctor for a written medical report to confirm your answers on the medical questionnaire. If you are a smoker we may arrange for a simple non-invasive test to be carried out by a nurse at your convenience. We will pay for any medical report or test. We will never ask you to go for a medical..
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Can I borrow more money at a later date?
You can apply for a further advance after six months.
The minimum amount is £10,000 and is subject to a new professional valuation, which you must pay for. We might also ask your doctor for another medical report, which we will pay for.
. Please note:
- The maximum will depend on the value of your property and your life expectancy at that time. If you borrowed the maximum amount possible originally, then it is likely that there will not be enough value in your property to fund a further advance – unless your property has significantly increased in value.
- You must also take fees into consideration and the fact that the interest rate for a further advance may well be higher or lower than when you first took out your lifetime mortgage.
Partnership reserves the right to decline an application for additional borrowing.
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How long will the process take?
Once you have received your illustration and you decide to apply, if you're able to proceed straight away, it usually takes around seven working days for a professional valuation of your property to be carried out.
When we receive the valuation we will provide you with an Offer of Loan, which will be valid for 21 days.
The process typically takes eight to ten weeks from application to receiving the funds. This assumes there are no delays such as mis- or non-disclosure of information; legal issues such as land disputes and property ownership or delays with obtaining any medical reports from your GP. It can help to keep in regular contact with your solicitor to keep any delays to a minimum.
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Will I need a solicitor?
Yes. This is essential because you need independent legal advice. If you don't have one, The National Solicitors Network (TNSN) can put you in touch with solicitors in your local area who are fully qualified, equity release specialists. You can contact them at www.tnsn.com or call 0845 389 0381.
Whilst acting for you, the solicitor must provide us with a Safe Home Income Plans before (SHIP) Solicitor’s Certificate, verifying that they have explained the terms of the contract to you.
You'll have to pay all your own legal costs and all disbursements, including £125 fee for title indemnity insurance (to limit search fees, which could cost substantially more and to minimise delays). This insurance may not be available if you are purchasing the property. We will pay our own legal costs.
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What is the Early Repayment Charge?
Your Enhanced Lifetime Mortgage is designed to be repaid when you (or both of you if there are 2 applicants) have died or leave your home because you need long term residential care. If you repay your lifetime mortgage at any time for any other reason you may have to pay a substantial early repayment charge.
The early repayment charge is calculated to recover costs that we incur when setting up the lifetime mortgage, together with any loss to us due to a fall in long term interest rates. It will vary according to your age(s) at the time of repayment.
Details of how this is would be calculated are included on the illustration.
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What happens with a joint application?
If your property is in joint names, you must make a joint application. We can only accept joint applications from two people, so if you own your property with more than one other person, you won't be eligible for the Enhanced Lifetime Mortgage.
If you apply in joint names, we will assess both applicants. The amount of cash we will give you will be based on your combined circumstances.
If the person you live with isn't already a joint owner of your property, you would need to put it in joint names. If you have a joint Lifetime Mortgage, no matter who dies or goes into residential long term care first, the other person can continue living in the property for the rest of their life.
If you're single now but later on decide to share your home (for example with a new partner or carer), you'll have two options:
- Transferring the mortgage into joint names – you'll need to be joint owners of the property for this to happen. It involves making a new loan application from which the original loan plus built up interest and charges will be repaid. If the person has a longer life expectancy than you, you may be offered a smaller loan than before, in which case you'd need to repay the difference yourself and any Inheritance Protection may be reduced.
- Waiver - anyone aged 17 or over at the time the mortgage completes who will be living in the property and not included within the mortgage, must be able to understand the transaction involved and will be asked to sign a form of consent, waiving rights of occupancy in favour of Partnership. It is a requirement that this person obtains independent legal advice on the transaction before they sign the waiver form. Any fees incurred must be paid by that person.
If you make a joint application and later decide to separate, you should consult your solicitor, since what happens with regards to the Enhanced Lifetime Mortgage will depend on the terms of your separation.
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What are the charges?
There are no arrangement, completion or valuation fees to pay to Partnership.
You will need to appoint a solicitor and pay their fees and all disbursements and any additional legal fees paid by Partnership for certain circumstances e.g. leasehold properties . You may also need to pay a fee to your adviser.
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Is commission paid to my Financial Adviser?
Your Financial Adviser will be paid a commission fee by Partnership. The actual amounts will be set out in your illustration.
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Are there any other condition sof the loan?
Full Terms and Conditions will be provided with your Offer of Loan but you can ask your adviser if you would like to see them now. Below is a guide to the basic points:
- Maintenance - You must keep the property in a good state of repair. If you don't do this, we can arrange any necessary repairs at your expense. It might be possible to add the cost to the loan.
- Insurance - You must continue to have adequate buildings insurance to cover at least the rebuilding costs of your home, determined by the valuation surveyor and confirmed in the official valuation. Our interest must be noted on the policy and we must be provided with copies of the renewal each year. Your solicitor can advise you on this.
- Occupancy - you must let us know if your property will be unoccupied for three months or more. If you leave the property vacant for more than three months without our permission, we may decide that your loan must be repaid then, rather than after your death.
- Existing secured debt - if you have any outstanding debt secured against the property, you must agree to repay this prior to or at completion of the Lifetime Mortgage. It will be possible to do a simultaneous transaction so you will be able to use the loan amount to do this, if necessary.
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What if I decide to move home?
You can transfer your Enhanced Lifetime Mortgage to your new home, provided you and the property meet our lending criteria at that time. You would obtain the same loan to value as if you were a new customer and a Property Transfer Fee would be payable. If the new property isn't eligible you'll need to repay the whole loan and accumulated interest when your current property is sold. In a worst case scenario you could be left with too little capital to buy a new property.
If your new property is eligible but there's insufficient value in it to cover your existing loan and accumulated interest, you'll have to pay back the difference to the lender from the sale proceeds of your original home and any Inheritance Protection may be lost. Under these circumstances no Early Repayment Charge is due but a Property Transfer fee would be payable to cover our costs.
Sheltered accommodation is ineligible, so if you decide to move into this or any other ineligible property, you'll need to repay the loan and find alternative financing for the purchase if there aren't sufficient funds from the remaining sales proceeds.
If you don't want to transfer the loan and built up interest and charges to your new property, the debt must be repaid in full on completion of the sale. An Early Repayment Charge may be payable in these circumstances
You will be liable for all fees associated with moving home.
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What happens if I go into long term residential care?
Your options will depend on your circumstances at the time.
If you have a joint mortgage with a second person, they can continue living in the home during their lifetime.
When the last survivor goes into residential long term care you will usually have to repay the loan, accumulated interest and any charges. This is normally done from the proceeds of the sale of the property and any money left over will be yours. The Early Repayment Charge does not apply if you sell your home because you are going into residential long term care.
There are some circumstances where you may need to go into residential care temporarily and want to move back into your own home at a later date. If this happens, you must tell us immediately and we will make a decision on what to do with your property. Each case is assessed on an individual basis.
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What happens when I die?
When you die (or in the case of joint applications, on the death of the survivor) the executor/administrator of your estate must notify us and the loan must be repaid, usually from a sale of the property.
If your property is sold for more than the outstanding mortgage balance, the difference will be paid to your estate, once sales costs have been deducted.
If the property is sold for less than the outstanding mortgage balance and sales costs, your estate will not have to make up any shortfall. This is the 'No Negative Equity Guarantee' which is a very important safeguard for you and any beneficiaries of your estate and means they will never be left with any outstanding mortgage when the property is sold.
Where a proportion of your property’s value is covered by the Inheritance Protection, your estate will retain at least that proportion of the sale proceeds.
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