What is equity release?
Your equity is the total market value of your home, minus any mortgage you haven’t yet paid off.In short, it’s the sum you’d walk away with if you sold the home for cash.But if you don’t want to sell your home, you may still be able to access a large portion of this money.If you have paid off most or all of your existing mortgage, you can consider an equity release scheme.Equity release can provide you with a large sum of money to spend while enabling you to continue living in your home.It can be particularly useful for covering large expenses later in life, such as long term care. However, there are downsides to accessing the value of your home in this way.
How does equity release work?
An equity release provider will provide you with either a lump sum or an income in exchange for part of the value of your home.This is achieved either using a type of mortgage, or by selling that portion of your home on the condition that you can continue to live there as long as you wish.
- All of our plans meet the Equity Release Council standards
- You have the right to remain in your home for as long as you choose
- You can move to another property without early repayment charges (subject to criteria)
Other important info
- The loan, plus compound interest, is typically repaid through the sale of the property when the last remaining applicant passes away or moves into long-term care
- No upfront Broker Fees only a £499 advice fee payable on production of a mortgage offer.
Lifetime mortgage benefits
Your specialist equity release adviser will explain:
- You can unlock cash from your home, tax-free, to help meet your needs in later life.
- You’ll always retain full ownership of your home and can stay in it for as long as you wish with a lifetime mortgage.
- You can choose to make reduced or no monthly repayments to suit your circumstances.
- You’ll never owe more than your home’s worth with a lifetime mortgage.
- You may be able to remortgage your plan in the future to release further funds or secure a better interest rate, although this isn’t guaranteed and may be subject to early repayment charges.
Potential drawbacks
Your equity release adviser will also outline the following important things to think about:
- A lifetime mortgage is a loan secured against your home and subject to compound interest, meaning the amount you owe can grow quickly.
- Equity release will reduce the value of your estate and may affect your entitlement to means-tested benefits.
- Equity release may leave you with limited or no property equity remaining.
- Equity release will reduce your financial options in the future.
- A lifetime mortgage is a long-term financial product and is not designed to be fully repaid until the death or entry into long-term care of the last remaining borrower, otherwise early repayment charges may apply.
A lifetime mortgage is a long-term commitment which could accumulate interest and is secured against your home. Equity release is not right for everyone and may reduce the value of your estate.
For further information, please contact our office and ask to speak to our Qualified Equity Release Adviser Mr Kevin Bates.