How the Range of Stonehaven Equity Release Plans Can Protect Your Inheritance
The former Halifax interest only mortgage, known as the Halifax Retirement Home Plan, was a lifetime mortgage where the interest had to be paid monthly. The advantage of this mortgage for retirees was that the original balance remained the same for the whole term. This type of mortgage proved to be immensely successful in the equity release market. Unfortunately, its withdrawal in August 2011 created a huge void for pensioners looking to raise retirement funding.
However, one suitable alternative that people are turning to is the range of Stonehaven Interest Select plans that also provide a mortgage on an interest only lifetime basis. The Stonehaven Interest Select Plans have proved to be an excellent alternative for those that missed the boat with the Halifax Retirement Home Plan.
Stonehaven provides equity release schemes aimed at the over 55’s. The interest only mortgage option known as Stonehaven Interest Select can be a suitable option for those looking to raise funds against their home, while also looking to protect their inheritance. Interest is paid monthly by direct debit. Therefore, it does not roll-up like a conventional equity release whereby the interest charged is usually added to the principle amount. This means that like the Halifax Retirement Home Plan, as long as the interest is paid every month, the balance remains the same and can be repaid after the house is sold.
Monthly payments must be made by the applicants, even if the funds are being released for their children’s benefit and the children have opted to pay the premiums. If the children still wish to pay make the payments then they would need to transfer the funds to the parent’s bank account, from which the direct debit is collected. We have encountered many such situations whereby children have offered to help with the interest payments in order to protect their inheritance. The Stonehaven Interest Select plans can therefore be ideal equity release schemes for those who are interested in protecting their estate and leaving an inheritance for their children.
We have now seen that the Stonehaven Interest Select is an innovative product that can be quite flexible as per individual circumstances. Another instance is, if for financial reasons one wishes to convert the interest only mortgage to a roll-up equity release scheme, Stonehaven allows you to do that. In fact, the mortgage automatically gets converted to a roll up scheme upon missing two monthly interest payments. Therefore, if finances become strained in the future and it becomes a necessity, the flexibility of the Stonehaven scheme will allow you to switch from interest only to roll-up equity release.
This provides the reassurance that with Stonehaven you can never be repossessed should missed payments ever arise. Nor would this either affect your credit file. This situation however could be a potential issue for existing Halifax Retirement Home plan customers, as they could find their houses repossessed or be forced into a sale they do not want, should payments be missed.
Another facet of the Stonehaven scheme is that the interest rate is fixed for life if they remain on the interest only lifetime mortgage basis. This cannot be said for the Halifax equity release scheme. With a range of tracker & fixed rates, they could be susceptible to future hikes in interest rates and the issues associated with meeting higher monthly payments when on a fixed monthly income. Therefore, Halifax customers should consider their options in the future should higher interest rates be on the horizon. By remortgaging to Stonehaven could provide them with peace of mind knowing their monthly payment will then never change.
Stonehaven are known in the market to provide innovative solutions aimed at the over 55’s. They are members of the Equity Release Council (formerly SHIP) and are also regulated by the FSA. Stonehaven Interest Select provides a clear alternative to those who were previously interested in the Halifax interest only mortgage. The range of Stonehaven schemes could therefore suit pensioners looking to release funds while also protecting their estate.