Meet John who is 78 years old and has admired his only granddaughter, Victoria who he’s seen grow up over the years. John is proud that Victoria has worked her way through school and university and has now secured a good job in London. John being close, has witnessed how Victoria struggles each month and particularly so in trying to save up every month with a view to getting on the housing ladder. From the income she receives, she spends what she earns on everyday costs and day-to-day living.
John’s always wanted to leave Victoria an inheritance, and with her being his only grandchild he’d decided that he would leave his property to her in his Will. However, seeing the financial plight she’s in John would prefer to help Victoria now, rather than later. He has therefore decided he wants to gift her some money immediately to help her raise a deposit for a flat, at a time when she needs it most.
He therefore informs Victoria of his intentions and meets his local equity release adviser to establish what options are available to him at age 78, and being a homeowner with no mortgage.
His equity release adviser reviews Johns current finances including his income and expenditure and sees that John spends most of his disposable income every month. Taking all this information into account, the equity release adviser recommends an interest roll-up lifetime mortgage which requires no monthly repayments and therefore will not affect his budget. During this review, the equity release adviser also notices that John has little in the way of savings and establishes with John that he may need additional capital in the future.
With this in mind, the adviser recommends that John adds a cash reserve facility to the lifetime mortgage scheme. The proposal therefore provides John with an initial capital sum to gift to Victoria, plus a drawdown facility which gives him money set aside, should John require any extra cash himself in the future. This cash facility is available to John without an extra costs and requires no additional advice.
Following the meeting with his adviser, John was happy that the outcome had actually served two purposes; firstly he was able to see his granddaughter enjoy an early inheritance to help her put a deposit on a new home, and secondly he will now have access to an emergency fund which he can choose to access whenever he needs it in the future.
In the end, John is pleased with the results of his meeting and proceeds with the recommendation provided by his local adviser which was for a drawdown lifetime mortgage.
For more information, or to discuss the possibility of gifting, or any other matters relating to equity release, please call the Equity Release Supermarket team on FREEPHONE 0800 678 5955.