We understand how difficult it is for the younger generation to buy a property. We work with several lenders who have innovative ways of helping your children make their first property purchase.

Are you interested in assisting your children / grandchildren in buying their first property?

We understand the challenges that younger generations face when it comes to owning a home, and we can offer you a range of options from a range of lenders, with many solutions.

The lenders we work with who have innovative ways to help your children make their first purchase, and there are different ways to release money from your current property.

Speak to one of our team today, to find out more:  01564 791 120

Sharia law prohibits the concept of borrowing and paying interest on loans: conventional residential mortgages therefore present a problem for consumers who wish to observe Sharia law strictly.  In 2007 the Financial Services Authority (now the Financial Conduct Authority) expanded its rules to accommodate the concept of what it described as “home purchase plans” – which are compliant with Sharia law.

There are at present no Sharia-compliant lifetime mortgage products – since these work on the basis of interest being charged to the borrower’s account and rolled up for payment at the point where the property is sold.  Home Reversion Plans – The Right Advice, nor The Right Retirement Plan Limited or The Right Mortgage Limited are not able provide advice or guidance on Home Reversion Plans.

There are various methods of home purchase which are compliant – the main ones being

“Murahaba” and “Ijara”.  Basically they work like this:

• Murahaba – the bank buys the property and sells it back to the customer at a higher price.  The customer then pays the higher price by way of paying equal instalments, over a fixed term;
• Ijara – this is more common:  the bank buys the property and sells it back to the customer – on a leasehold basis – so the customer pays rent for a fixed period, at the end of which the (freehold) property becomes the customer’s.  The amount of rent paid each year is assessed according to market rates, not prevailing interest rates.

You may have lots of questions, depending on your own circumstances and one of our specialists would be happy to help answer these questions for you.

No. most providers will not accept static or mobile homes as suitable security – either for a standard mortgage or an equity release loan.

The equity release provider is accepting your property as security for its loan: this means that the provider needs to be satisfied that your property can be re-sold on the open market – either when you or your executors come to sell it or, in exceptional circumstances, if the provider has to take possession of it (because you have failed to comply with an obligation set out in your contract) and sell it.

Many lenders/providers ask questions in their application forms about your property’s age and how it is built (brick walls/roof slates or tiles and so on).  This is because some types of construction have in the past suffered structural defects.  This doesn’t mean that they are not safe to live in – but it has led some lenders and providers to decide not to accept them for mortgage/equity release purposes, because they are concerned that if there are problems in the future which need to be put right, this may affect the property’s value and its attractiveness to a future buyer.

Properties which are unlikely to be acceptable to equity release providers include:

• Studio or basement flats;
• Flats of maisonettes in a local authority or housing authority block of more than four storeys;
• Retirement properties;
• Static/mobile homes;
• Houseboats;
• Farms;
• Hotels;
• Guest houses/B&Bs.

Products which fully meet the Equity Release Council’s Product Standards are required to feature a “no negative equity guarantee”.  Put simply, this guarantee means that you, or more specifically, your estate will never owe more than the property is worth when it is sold.

Under your equity release plan, you have the right to live in your home until you need to move into a smaller property (whereby the plan may be transferrable), or move into permanent care, or until death. Your property will be sold and the sale proceeds will be used to repay the money owed to the provider of your plan. Any money left over, at the end of your plan, will be paid to you or your beneficiaries, in accordance with your Will.  In the unlikely event that the value of your house has decreased significantly, it is possible that it might not be worth enough to cover the amount which you owe.  The “no negative equity guarantee” means that if this turns out to be the case, the remainder of the loan would be written off.

Most people who take out equity release use a lifetime mortgage. Usually you don’t have to make any repayments while you’re alive. Instead, interest is ‘rolled up’, which means the unpaid interest is added to the loan. This means the debt can increase quite quickly over a period of time.

Your private and state pension is unaffected by equity release.

Pension credit is an additional means-tested benefit that tops up the state benefit for those pensioners with low incomes.