More2Life Interest Choice Plan is one of approximately half a dozen interest only lifetime mortgage and equity release products on offer. More2Life returned to the market after taking a break during the mortgage crisis. In part it was due to new regulations announced by the Financial Services Authority. Now called the Financial Conduct Authority they ensure companies such as More2Life are providing products within the new regulations. More2Life came back to the market with a clear objective of offering competitive equity release products.
The Interest Choice Plan is a lifetime mortgage interest only basis. The loan requires monthly interest payments to be made by the homeowner. It does have a drawdown facility attached.
Criteria for the More2Life Interest Only Lifetime Mortgage Deal
Just Retirement backs and funds the More2Life Interest Choice Plan. They themselves are specialists in annuity and lifetime mortgages. This plan is available for homeowners starting with the youngest homeowner being at least 60 when filing jointly, or as a single applicant.
The interest rate is fixed for life as an interest only requirement. Each month the accrued interest must be repaid. Loan to values begin at 20% for age 60 increasing to a maximum LTV of 45% when a person is 84. The initial lump sum minimum is £10,000, where the plan holder can set up a cash reserve facility to withdraw more.
The minimum property value is £70,000, with lending possibilities in England and Wales.
Unique Features of the Mortgage Interest Choice Mortgage
As an interest only drawdown mortgage consumers have the option of taking more than £10,000 as an initial lump sum. After the first 12 months, plan holders can remove more funds in £5,000 increments as long as there is enough in cash reserves. This further borrowing via drawdown will only be offered on a roll-up basis. Therefore, for those looking to protect their inheritance, the accuracy of the uptake of the initial lump sum is paramount.
Inheritance protection is part of the lifetime mortgage since it has a drawdown feature and interest only payments. By paying off the interest, the capital sum remains the same until more is withdrawn from the facility. The capital repayment amount can be the maximum available or consumers can leave funds in the account.
Repayment required is the interest only element; however, homeowners have an option to choose to pay a minimum of £25 per month instead of the full amount of interest charged for the month. A repayment of 100% interest keeps a level balance, should the homeowners choose a lower amount then there will be an element of roll-up albeit less than otherwise have been if no repayments had been made.
It is possible to change the loan into a roll-up plan later on, where interest will compound onto the remaining balance. Unlike Stonehaven, whom increase the interest rate of their plan upon ceasing payment & giving no prior warning, More2Life will always keep the interest rate fixed the same as at the outset.
Eventual repayment of the More2Life Interest Choice plan occurs upon the death or necessity to move into long term care. At that point the house will usually be sold with the proceeds being used to settle the More2Life loan.
More2Life Equity Release Incentives
Incentives include a non-exclusive offer of a drawdown interest only mortgage, which maintains a level balance for life.