When it comes to completing your estate planning, you also need to consider the value of an interest-only mortgage in Braintree and throughout Essex. With this in mind Laura Richardson looks to explain more about the value and use of an interest-only mortgage in Braintree . . .

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The Financial Conduct Authority has released a statement this week publicly raising their concerns regarding the use of Interest-Only mortgages. Paying off your mortgage on an interest-only basis means that at the end of your agreed term there will be a final lump sum to be paid off. This lump sum would need to be readily available in savings or other funds. The Executive Director of Supervision at the FCA stated that “[the FCA] are very concerned that a significant number of interest-only customers may not be able to repay the capital at the end of the mortgage and be at risk of losing their homes.” Following an investigation, they found that just below 20% of mortgages in the UK are currently being paid off either on an interest-only or on a part-repayment basis, rather than a full repayment basis. If you are currently paying your mortgage on an interest-only or part-repayment basis, the FCA advice is for you to contact your Lender as soon as possible.

Many people’s homes are their largest asset and form the majority of their Estate worth but this relies upon their being an amount of equity in the house. In many cases by the time the home owner dies, they have paid off their mortgage or accrued an amount of equity within the property which is usually then released through sale. However if you arrange to pay an interest-only mortgage in Braintree or on a part-repayment basis then, dependent upon the rise and fall of house prices, you may not be accruing any equity. Furthermore, if you come to the end of your mortgage term without the means to pay off the final lump sum, you may be forced to sell your home. Should you wish to ensure that your house provides an inheritance for your loved ones, it is important to understand the implications of your mortgage payment arrangements on the potential value of your Estate.

Planning for your own financial future as part of your Estate planning can be a daunting prospect, however, Andrew Douglas Wills and Legal Services offer a free initial consultation in which we can discuss your concerns and requirements, as well as discuss the services which we offer which may be beneficial including an interest-only mortgage in Braintree. Contact us today to arrange your FREE no-obligation consultation, whether in Braintree or the surrounding areas of Essex.

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