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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.
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.
If you require further information on this
product, please complete the fact find
HERE (right click
link, save as..) and email
it back to us as an attachment.
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