Equity Release Loans For Those In Poor Health
Despite the fact that several lenders have withdrawn from the market and that the number of new loans offered over the course of the past couple of years has fallen, the equity release loan market is still in a healthy situation, with a growing number of retired people taking out such loans.
But now a new provider is planning to enter the equity release loan market by the end of this year and intends to offer a slightly different type of loan which could be beneficial for many borrowers.
Partnership, a company who currently offers annuities on an enhanced basis for those with impaired health issues, is planning to offer equity release loans on a similar basis to its current product base.
Currently, equity release loan providers do not take health issues into account when offering a new loan to retired individuals. The maximum loan to value on offer is based on average life expectancy at a particular age.
The typical maximum loan to value varies between 20 per cent and 50 per cent loan to value, depending on age. This allows for interest to be added to the loan over its lifetime, without creating a negative equity situation.
However, for someone in poor health, life expectancy could be significantly shorter than it could be for someone of the same age in good health, yet they will not receive a higher loan to value on an equity release loan from a traditional lender.
Although the full details have not been released as yet, the new loan from Partnership is likely to offer a higher loan to value on equity release loans than a traditional lender, for those with impaired health issues and although Partnership say that they do not intend to be a large player in the equity release loan market, this product could prove extremely popular with many borrowers.
