Scottish Building Society operates a risk-averse lifetime mortgage product. Their equity release products are more traditional and beneficial for members. The company began offering financial products in 1848. Their financial services have changed slightly; however, the dedication to their members has not. Their lifetime mortgage products are designed to offer a better option than non-member products found somewhere else.
How does the Scottish Building Retirement Mortgage Meet Lifetime Mortgage Demands?
The Scottish Building Society lifetime mortgage is a retirement mortgage for members. It is also based on interest only criteria. Homeowners can decide if they wish to make interest only or capital sum and interest repayments. If homeowners repay only interest the principle balance will remain the same for life. If capital and interest payments are made, the entire mortgage can decrease over their life with the potential of repaying the entire loan depending on the amount of repayments made. There is a caveat to the repayment in which only 10% of the capital amount can be repaid per annum, without any early repayment penalty. Any amount over 10% will be subject to a penalty based on the amount of over payment.
Qualifications and Criteria
To qualify for the retirement mortgage, homeowners need to be members and living in Scotland, Northumberland or Cumbria. The minimum age requirement is 65, with no maximum age limit. The Scottish Building Society requires proof of retirement income. All lending criteria on standard mortgages apply including credit history checks and income checks. The Building Society requires homeowners to qualify as a means of ensuring the interest only repayment can be made.
The property value is used in the calculation to determine the amount of loan to value percentage awarded to the homeowner. A calculation can be done with a retirement mortgage calculator online; however, the Scottish Building Society representative will conduct their own calculation after a property valuation.
Equity Release Features and Incentives
Scottish Building Society’s lifetime mortgage includes a free valuation plus £150 towards remortgage legal fees. There is no early repayment charge after 3 years with this lifetime mortgage, which is also a member incentive.
A main feature of the retirement mortgage is the amount that can be borrowed. A single applicant can borrow 4 times their income. Joint applicants can access 4 times the first income as well as 1 time of the second income or total of 3 times the joint income.