The situation
Having resided in the same town for their entire lives, the Smiths had always desired to retire to the seaside area of Sandbanks. The hope had always been that they would have sufficient savings to allow them to do this.
As well as searching for the perfect property for themselves, the Smiths also had a son, Richard. He lived and worked in London and had a young family of his own. The Smiths had hoped that any property that they bought would be sizeable enough so that the entire family could get together, with Richard, his partner, and children holidaying there.
They quickly found the perfect property, but the issue was the price tag that it carried. Coming in at £700,000 even by tapping into savings, their monthly income, and the funds from selling their current home, it was simply unaffordable.
Potential solution
Keen for the move to Sandbanks to become a reality, the Smiths made enquires with estate agents. The hope was that a similar property could be located, but a more affordable one. Rather than hunt for an alternative property, the estate agent suggested that the couple explored what equity released could offer. While Mr and Mrs Smith knew a little about equity release, they had no idea that this could apply to a property that they hadn’t even purchased as yet.
They were able to gain £450,000 from the sale of their home, leaving them with a £250,000 shortfall. This shortfall was to be covered by a lifetime mortgage being taken out on the new property. To stop interest building on the £250,000, an interest roll-up plan was used that has the option for an annual repayment.
By taking advantage of equity release has to offer, the Smiths now have their dream property and they also have ample space for their family to visit and spend the holidays together.