We paid off our existing mortgage and credit card debt to enjoy a better retirement
Liz and David Nicolson worked hard all their lives but like so many, they found themselves nearing retirement with a mortgage to PAY Off, CREDIT CARD BILLS AND little to no savings. But, rather than panic, the couple found a way to clear existing debts and do up their home.
‘As the years went by, it was getting nearer and nearer to the end of our mortgage term – it was a very stressful time,’ says Liz, a former nurse in the NHS.
‘We didn’t have the capital to pay off the outstanding balance because we’d taken an interest-only mortgage, and were worried we would have no choice but to sell and get somewhere smaller.’
Liz and David, a self-employed carpenter, bought their Middlesex home 22 years ago with a part-repayment and
part-interest-only mortgage, which they thought at the time they would be able to pay off.
But, just a few years from retirement, the couple’s £75,000 interest-only mortgage still needed to be cleared and they had £25,000 of credit-card debt.
‘£25,000 sounds like a lot of money, but it mounts up very quickly, even without trying,’ says Liz. ‘We used credit cards for general living expenses, things we needed but didn’t have capital for, for example, when the car broke down and we had to pay for repairs.
‘The problem is, we tried to pay the minimum, but the debt just didn’t go down in a drastic manner. The interest rate on credit cards is so high that you never seem to get to the bottom.’
Fearing that they had no option but to sell their beloved family home and buy somewhere smaller, the Nicolsons put their house on the market. ‘We looked at lots of other places, but nowhere that was right. We liked our house and the local area,’ says Liz.
Finally, the couple decided to look into whether equity release was a possible alternative to downsizing. The property they had bought for £76,000 in 1998 was now worth £425,000.
After putting in a call to Key Equity Release, their adviser told them it meant they could draw on its value to clear their existing debts and retire in the home they love. For the Nicolsons, a lifetime mortgage was the lifeline they needed.
‘We were delighted,’ says Liz. ‘Equity release gave us the answer, meaning we could stay in our home and pay off the existing mortgage along with our credit cards. We even had money to redecorate the front room and we were able to enjoy nice meals out.
‘For others in a similar position to ourselves, I would definitely suggest speaking to an equity release adviser.’