Applying for a lifetime mortgage can be a transformative step in unlocking financial freedom during retirement. However, property valuations don’t always align with expectations, which can impact the borrowing amount available to you. While this might feel like a setback, it’s often an opportunity to explore other tailored solutions.
The Role of Property Valuation
Lenders assess the market value of your property during the application process to determine how much they can lend. If the valuation comes in lower than anticipated, the amount you’re able to borrow under the specific lifetime mortgage product may need to be adjusted. This happens because lenders have strict loan-to-value (LTV) criteria for their products.
Adapting the Plan
A lower valuation doesn’t close doors; it opens up new possibilities. Here’s how you can move forward:
- Explore Alternative Products
If the original lifetime mortgage product no longer fits the lender’s criteria, your adviser can recommend an alternative solution. This could involve switching to a similar lifetime mortgage product with adjusted terms or exploring different features, like flexibility with repayments or no early repayment charges. - Consider Other Later Life Lending Options
A lifetime mortgage isn’t the only way to access funds in later life. Depending on your needs, other options may offer a better fit:- Retirement Interest-Only (RIO) Mortgages: These are designed for people who can afford to pay the interest monthly, allowing the loan balance to remain unchanged until the property is sold. This can be a viable option for those with reliable income in retirement.
- Later Life Mortgages: For older borrowers, traditional repayment mortgages with terms extending into retirement may provide the funds needed, especially if downsizing or other changes are planned in the future.
- Reassess Your Financial Goals
A small adjustment in borrowing might not significantly impact your objectives. It could simply mean focusing on the highest priorities first or exploring other ways to bridge the funding gap, such as drawing on savings or restructuring financial plans. - Collaborative Problem-Solving
Your adviser will work with you to ensure any new solution fits your needs, offering clarity on how it helps you achieve your goals while remaining affordable and sustainable.
Why It’s Not All Bad News
A lower valuation can feel disappointing at first, but it’s often a chance to refine the plan and make sure you’re getting the most suitable solution for your circumstances. The right advice ensures your financial goals remain achievable, even if adjustments are necessary.
The Importance of Professional Advice
Later life lending offers a range of solutions to meet diverse needs, but navigating the options can be complex. An experienced later life lending specialist can help you understand the pros and cons of each option—whether that’s a lifetime mortgage, a RIO mortgage, or another tailored product—and guide you toward the one that best suits your needs.
Ready to find out more? Visit our dedicated later life lending page to arrange your free 10 minute discovery call!
Mike Jones
Later Life Lending Specialist
Mike Jones is a dedicated later life lending specialist, leading the “Mewstone Later Life Lending” service with a focus on providing personalized financial solutions for those navigating the complexities of retirement and home ownership. With years of experience in retail banking and a deep understanding of later life lending, Mike is well-equipped to guide you through critical decisions such as equity release, retirement interest-only mortgages, and more.
Releasing money from your home is a significant choice, and Mike understands the importance of ensuring you are fully informed about your options. His approach is rooted in offering unbiased, expert advice tailored to your unique circumstances. Whether you’re looking to improve your retirement lifestyle or need help planning your financial future, Mike is committed to finding the right solution for you—without any preference for particular lenders or products. His ultimate goal is to help you make informed, confident decisions that suit your long-term needs and give you peace of mind.
At Mewstone, Mike believes it’s not about “selling” a product but about finding the right fit for each individual. You can trust that, when working with Mike, the focus is always on what’s best for you and your financial future.