The Interest Choice Plan is also known as an interest only lifetime mortgage which provides you with greater flexibility than a traditional roll-up lifetime mortgage plan. It can provide you with more freedom in both how you release your tax free cash and how you intend to repay it back. More2life Interest Choice Plan as with all equity release schemes places no restrictions on you spending the money in whatever way you wish.
More2life now provides you with the option to pay the interest off monthly, so that a portion or all of the interest can be covered. With an optional contribution amount starting from £25 per month, you can decide how much you wish to pay. If you wish to repay some or the whole amount of interest for your lifetime mortgage, it can help in decreasing the amount you owe when the time comes and your property will need to be sold.
As a result, you will be leaving more inheritance to your loved ones which can be beneficial compared to the standard type of lifetime mortgage whereby the interest will roll-up, thus reducing the net equity in your property. For even greater flexibility, the more2life Interest Choice Plan provides you with the option to take further release(s), even after taking the initial lump sum. This is commonly known as a drawdown lifetime mortgage. However, more2life plans are now the first equity release provider to actually offer a drawdown interest only lifetime mortgage scheme.
With more2life, interest will be charged monthly after the money has been released. The current rate of interest is 6.17% and this is fixed for life. However, you are only charged interest on the initial tranche of funds released by more2life. Currently, any further drawdown payments taken will be set up on a lifetime roll-up basis, resulting in a combination of two schemes under one roof.
Some people are wondering how much interest they should pay for the more2life Interest Choice Plan. Actually, it will entirely depend on you. All you need to do is to determine the amount that you can afford to pay for each month. The minimum required is £25 and you can also choose to pay the entire interest. It would be best to choose a payment that is just affordable for your budget. It is hassle free since the payment will be automatically collected by Direct Debit and is fixed for the rest of your life.
You have the option to continue making payments until such time that you don’t want to anymore. At a later point you have the option to cease your monthly payments and convert the scheme into a roll-up basis. This avoids situations where arrears develop and the unfortunate event of adverse credit, or worse still repossession. The switching facility from interest only to roll-up provides peace of mind that the house will always remain yours, stress free. Please bear in mind though that once you decide to stop making payments towards your interest, then there are no chances that you can restart.
There are some qualifications in order for you to be eligible for the more2life Interest Choice Plan. The age requirement is between 60 years old and 99 years old. The property must be located in England and Wales currently, with a minimum property value of 70,000. The minimum amount for the loan is £10,000, with any subsequent top-ups being for a minimum of £5,000.
Cautions for any equity release plan
You may enjoy everything you have read about the more2life plan outlined here including the changes you can make over the life of the loan. However, until you compare interest only, roll-up and drawdown plans with other companies you will not understand the true benefits of the product under discussion.
You also have one other choice in releasing equity. It is home reversion. It does not require a loan, but requires the sale of your home. For some having no payment and no debt to leave behind is less of a burden, but for most they would rather preserve their home and hope their children have a different option than selling it in the end.
The best way to make a concrete decision is to speak with an adviser who can help you with the ins and outs of various plans. Also include your family in the decision since they will be affected too.
For any additional information, or a more2life Interest Choice Plan quote, speak to EquityReleaseSupermarket on 0800 678 5159 today.