To explore equity release as a means of releasing the capital tied up in your home while you continue to live there, you need to talk to an expert.
Equity release is commonly used for the following purposes:
- a lump sum to help your children or grandchildren onto the property ladder
- to supplement your income in retirement
- to pay for home improvements
- to buy a new car
- to pay for the holiday of a lifetime
- to pay off any debts you may have
- to repay an interest-only mortgage
- to purchase a new home
Equity release providers guarantee you can live in your home until you or your partner die or permanently go into long term care. The “no negative equity guarantee” means you will never owe more than the value of your home. Releasing equity from your home can be an excellent way to obtain finance for a mortgage if you are aged over 55. It is important to discuss your decision with family members and those that might inherit from your estate.
The two main types of equity release schemes are a lifetime mortgage and home reversion plan.
Lifetime mortgages are similar to a traditional mortgage, as a lender will agree to advance you a sum of money which can be taken as a tax-free lump sum, a regular monthly income or a combination of both. No repayments are made until the property is sold, so the interest is rolled up and added to the total amount of the loan. The capital may be released in stages, and the interest is only charged when the capital is advanced to you, so the interest and the total debt builds more slowly.
Home reversion plans enable you to sell all or part of the value of your home in exchange for a tax free cash lump sum, or regular payments, and a guaranteed lifetime lease. When the property is sold, usually on death, the reversion company receives its share of the proceeds of the sale. So, for example, if a 50% share of your home is sold, the reversion company receives 50% of the proceeds when it is sold.
We can introduce you to a trusted and professional equity release advisor to help you find out more about accessing the wealth tied up in your home, call 01923 729030 or contact us.
Think carefully before securing other debts against your home. 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.
Equity Release mortgages are arranged on an introduction only basis.