Equity Release

What is Equity Release?

 

Equity Release allows homeowners over the age of 55 to release the equity in their homes, but still allowing them to live there for as long as they wish. This is a lifetime mortgage. To understand the features and risks please ask for a personalized illustration.

The Options Available

When choosing an Equity Release Plan you will have two types of scheme to choose from – a Lifetime Mortgage or a Home Reversion Plan, both of which could allow you to take a cash lump sum.

Lifetime Mortgages

The most popular method of releasing cash is currently a lifetime mortgage. A lifetime mortgage is a loan which enables you to release the value tied up within your home allowing you to receive a cash lump sum, which you can spend as you choose. This long-term loan which is secured against your property, is paid off when your home is sold, usually following your death or when you permanently vacate the property. No interest repayments are required until the loan is paid off with the interest being "rolled up" with the loan.

Throughout the period of the loan you and your partner are able to continue to live in your home and benefit from an improved lifestyle as a result of the release of the cash lump sum.

Lifetime mortgages pay out a cash lump sum at the commencement of the mortgage, however a flexible lifetime mortgage allows you to choose a lower initial lump sum with access to a pre-approved cash reserve from which you could withdraw more monies as and when required. This ensures that you keep any interest rolled up to a minimum and allows you to decide when you wish to make withdrawals in the future.

Home Reversion Plan

Available to those aged 65 and above, a home reversion plan involves selling part of your home usually to an Insurance Company who will grant a lifetime lease to you which entitles you to remain in your property, rent free for the rest of your life.

Plan holders agree to sell a percentage of their property and receive a proportion of that percentage, which is dependent on age and gender, as a tax-free cash lump sum.

When the property is sold, usually following your death or when you permanently vacate the property, the sale proceeds, less any selling costs, are divided between the home reversion company and yourself in the proportions that each party owns.

There are many different providers that have variations on what we have generally mentioned above. Once we have your full information and requirements we can use our expertise to search and then select the most suitable scheme for yourself.

There is a lifetime mortgage factfind for completion for anyone enquiring about such an arrangement that can be downloaded from the link shown.

Please contact our Financial Services department to arrange a mutually agreeable appointment.

To understand the features and risks of a home reversion plan ask for a personalized illustration.

CHECK THAT THIS MORTGAGE WILL MEET YOUR NEEDS IF YOU WANT TO MOVE OR SELL YOUR HOME OR YOU WANT YOUR FAMILY TO INHERIT IT. IF YOU ARE IN ANY DOUBT SEEK INDEPENDENT ADVICE.

There will be a fee for equity release advice. The precise amount will depend upon your circumstances but we estimate that it will be £500.00.

 

For more information, please contact our Financial Services department here to arrange a mutually agreeable appointment.