The Bank of Grandad and Grandma – Would It Be A Good Option For You?

Bank of Grandma and Grandad

We have got used to the expression, “The Bank of Mum and Dad”, with reference to the financial support that parents can offer to their children who are struggling to get onto the housing ladder. However, today it’s grandparents who are increasingly helping family members to climb onto the first rung. A new term has come to the fore, “The Bank of Grandad and Grandma.”

In fact, a survey last year by Santander Mortgages discovered that 1 in 10 first-time buyers are now turning to their grandparents for financial support. This is a big increase from 5 years ago when the figure was just 2%.

Equity Release – Advantageous for the family and grandparents

For many grandparents it is something that they want to do whilst they are still alive, so that they can enjoy seeing younger relatives in a home of their own. Many grandparents are asset rich but cash poor and so it may be an option to consider an equity release mortgage. Here, capital is released from their home without them having to move. This can be a solution that may be advantageous to the family and to the grandparents themselves.

Drawdown Lifetime Mortgages

Quite often drawdown lifetime mortgages are the most popular as they will enable you to release equity when you need it. The interest that this type of mortgage accrues is only repaid when you pass away or you and your partner go into care. The mortgage will pave the way so that you can give your children or grandchildren an early inheritance. It also has the advantages of paying off your mortgage, if you wish and providing you with money during retirement.

What to consider before helping the family

However, as a grandparent, there are things that you must consider before you take on this arrangement.

  • Are you gifting the money or is it a loan?
  • Are you set financially for the future?
  • Can you really afford to lend the money?
  • What will happen if the family member splits from their partner?
  • If you are loaning the money, will the recipients be able to pay you back later?

A Big Decision – Ensure you get the right advice

It is certainly a big step and your generosity and providing the Bank of Grandad and Grandma will almost certainly be really appreciated. However, you must consider your needs as you grow older. This means that it’s important not to gift or loan more than you can actually afford. The decision to take out an equity release mortgage should not be taken lightly. It will impact on the value of your estate and it may even affect your state benefits entitlements.

How can Paxton Equity Release help you?

Martin from Paxton Equity Release is an experienced equity release mortgage adviser and will be delighted to go through your options. He will sit down with you and discuss what is best for you and your family over a cup of coffee or tea. You will then have all the facts to take to your financial advisor should you feel that is necessary. Please call Martin on 01892 617070 for a chat or email martin@paxtonuk.com

You can help your grandchildren with financial support from an equity release mortgage

 

Is An Equity Release Mortgage Right For Me?

 

An Equity Release mortgage for many people is a practical and sensible way of releasing cash from their homes, so that they have the money available to do the things they want to do. However, taking out this type of mortgage shouldn’t be taken lightly and it’s important that you know all of the facts and implications before you commit. An equity release mortgage isn’t right for everyone!

Why would you want to release cash from your home?

First of all, let’s have a look at the types of people this mortgage would suit. And before going any further, you do have to be over 55 and a homeowner.

  • You love your home and want to stay there
  • You need some tax-free cash to enjoy life to the full
  • You want to supplement your income and/or pension
  • You want to give a grandchild a deposit on their first home
  • You would like your family to benefit now, not after you have passed away

An equity release mortgage will allow you to stay in your home

Many people love their home and don’t want to move but find themselves asset rich, but cash poor. With an equity release mortgage, you can continue to live in your home for the rest of your life or until you move into permanent residential care. In most cases, you won’t have to make regular payments unless you actually want to because the amount you owe is paid back from the sale of your home after your death.

You will have cash to enjoy life

The tax-free cash that is released from your home can be used for a host of things ranging from home improvements including an extension or new kitchen, holidays such as a cruise, a new car or caravan, paying off a debt or mortgage or just enjoying days out.

An equity release mortgage will supplement a pension shortfall

The release of a lump sum can be used to supplement your income and pension. When retirement does come around, you may find that you haven’t planned properly and you have a shortfall in monies coming in each month and this is where an equity release mortgage could make up the deficit.

You can financially help your family

Many people want to help their children or grandchildren, particularly if they are struggling to get on the housing ladder. Giving a family member a lump sum could fund their deposit and enable them to make their first purchase. It’s something you would love to do for them now, so they don’t have to wait until you have passed away.

How can Paxton Equity Release help you?

Martin from Paxton Associates will be delighted to go through your options over a cup of coffee or tea so that you can see whether an equity release will meet your needs and circumstances and be the right choice for you and your family. Please call Martin on 01892 617070 for a chat or email martin@paxtonuk.com

 

COVID-19 Survey by the Tunbridge Wells Business Network

The Tunbridge Wells Business Network (TWBN) is a networking group established in 2012. I’m proud to say I was a founder member. Recently we conducted a survey to find out how people are feeling about work during the lockdown, how it’s affecting their businesses, and whether people are more inclined to support local business during and after the lockdown.

The results are a really interesting read and show that actually two thirds of businesses feel they have been adversely affected by the COVID-19 crisis. The survey was conducted between 14th April and 28th May 2020.

You can see the full report here.

Please get in touch if you need any more information.

Paxton Equity Release – still open for business

In this unprecedented time, the coronavirus is clearly changing the way we live. Naturally, at this time, the primary concern for everyone is health and protecting those who are most vulnerable. However financial wellbeing is also an issue, so Paxton Equity Release remains open and available to answer any questions about your mortgage.

To talk about this in more detail, call me, Martin on 01892 617070 today or ping me an email to martin@paxtonuk.com