Only a few of the financial institutions around today have been open since the 19th century. Scottish Building Society is one of these long standing financial locations having opened its doors in 1848. It was first under the name of Edinburgh Property Investment Company, but in 1928 the name was changed to its current one. SBS has merged with Century Building Society as of 2013 making it one of the larger building societies left in Scotland. As an independent financial institution they offer Scottish residents with retirement mortgages.
Focusing on Lifetime Mortgage
The Scottish Building Society does offer a retirement mortgage in the form of a lifetime mortgage option. This retirement mortgage is provided to individuals 65 years or older who need to release equity from their homes. The maximum loan amount is 35% of the property valuation; however they do set a minimum and maximum loan amount in pounds: £30,000 min up to £300,000 max. The maximum in pounds is all that will be given even if the 35% of home value is more. At the moment there is no maximum age for Scottish Building Society’s lifetime mortgage.
As a retirement mortgage with lifetime mortgage properties, the society does require income verification. Not only does the home have to meet certain qualifications, but the applicant must have enough income. The income qualification for a single applicant is 4x income. Joint applicants need 4x first income plus 1x second income or 3x joint income.
Repayment of Scottish Building Society Retirement Mortgage
The lifetime mortgage is set up as an interest only lifetime mortgage. For this reason interest will need to be repaid on a monthly basis; however, the principle sum is not paid until permanent living in a long term care facility or death. The last survivor of a joint application must repay the loan at death/long term care. The capital balance will not change unless homeowners elect to repay up to 10% of the capital per annum as a way to lower the eventual repayment. By paying interest or even capital and interest there is a style of inheritance protection built in based on home value appreciation or depreciation.
Another part to the retirement mortgage from the Scottish Building Society is insurance requirements. The building society requires building insurance to be in place before the lifetime mortgage funds are released.
Scottish Building Society’s retirement mortgage comes with a free valuation as well as £150 towards the legal fees.