Equity Release
What is Equity Release
Some of the value of your property is “released” as money, without the need to sell the property.
The “release” amount depends on the property value, your age and how much you borrow.
The Equity Release choices need to be right for you, the process can affect means-tested benefits, taxation, and inheritance.
A balance of money and house
Expert Financial Advice is Essential
Equity release may not be the best solution for you, you should consider other alternatives first. Many providers only sell equity release products through a Financial Advisor.
You should always seek expert financial advice on these schemes, and legal advice from a solicitor.
Read on to learn more about Equity Release
Equity Release and the Lifetime Mortgage
There are two types of equity release plans: Home Revision Plans and Lifetime Mortgages. We only deal with the Lifetime Mortgage.
With the lifetime mortgage, a long term loan is secured against your property. You retain ownership of the property if you abide by the terms and conditions of the loan.
The amount borrowed, plus any charges and rolled up interest will usually be repaid on death or if the property is sold when a person goes into long term care. There are flexible options to repay interest back on a monthly basis, or pay capital and interest within limits during your lifetime.
To be eligible for a lifetime mortgage, you must own the property which must be in England, Scotland or Wales, usually your main residence, be a UK resident, be at least 55 years of age. There are other considerations taken into account.
Included in most of the lifetime mortgages we offer are:
- No negative equity guarantee
- Optional inheritance guarantee
- Early repayment waiver
- Downsizing protection
- Retained ownership
- No repossession
- Options to move home
- Additional Reserve Cash facility
- Options to make interest payments
- Fixed interest rate
- Options for loan repayment
What about the cost?
These are the main costs, but these can vary due to individual circumstances.
- Property Valuation fee
- Completion fee
- Solicitor fees
- Financial advisor fee
- Early repayment charge
The Lifetime Mortgages we offer have a “no negative equity guarantee”. This means that when your property is sold, if the proceeds after legal costs fall short of the outstanding mortgage debt, the shortfall will not be payable. If the property is sold for more, the excess belongs to you and your beneficiaries.
Asset Rich – Cash Poor
If you are approaching retirement and can identify with the phrase “Asset Rich – Cash Poor” you may be considering raising some money by doing some kind of equity release scheme to access some of your wealth. Here we explain and can help.
How Equity Release can help me
The cash freed up can supplement your pension, pay off debt, help family buy a property, do on that holiday of a lifetime. There are of course alternatives, such as downsizing your house or using savings.
How do I get an Equity Release Lifetime Mortgage?
This procedure is a guide:
- Investigate and research to understand the basics, your financial advisor can help with this.
- Discuss with you family
- Discuss with your financial advisor
- Complete the application forms
- Independent property valuation
- Contact your solicitor
- Get your lifetime mortgage offer
- Complete the legal documents
- Release cash to solicitor
What is a Home Revision Plan
You sell all your property in exchange for a cash lump sum. The reversion company takes ownership of your property, but if this is your main property you have the right to live there rent free. Some schemes allow you to sell part of the property, then you retain an interest in the property.
We don’t provide home revision plans.
Call Jan to get started