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If you are a homeowner who is aged 55 or over, equity release is a means of accessing the wealth that is the value of your property. Without selling or moving out, you can take a tax-free sum to help you enjoy your later years, whether as a lump sum or smaller monthly payments.
While many people seeking some capital opt for a Second Charge Mortgage to protect a low interest rate on their existing mortgage, it is not always the ideal approach for those later in life.
There is a vast amount of information out there reading plans, mortgages and the equity release market, and we know it can be challenging to understand how the process works. As a team of expert and trusted equity release advisers and brokers, we are here to offer you honest, unbiased advice as we help you find the best deals tailored to your needs.
There are always important things to consider regarding loans secured on your property, including equity release routes, as that means your property is at risk if you can't meet the agreed repayments at a future date.
Some of the top considerations for whether releasing equity the right option for you include:
To discuss the process, your property or the type of equity release plan which would be best suited for you, get in touch, and we'll help you in any way we can. We avoid jargon and confusing sales tactics, providing just a simple and straightforward service.
The types of equity release schemes you can consider include Lifetime Mortgages or Home Reversion Plans, both of which provide a fixed percentage of your home's value today, as you agree to sell that percentage of your home's value to the lender.
There is no fixed 'term' or date by which you're expected to repay your loan for these products. The advance is only repaid after you pass or if you have move home, such as to enter long-term care.
You should remember that the money you receive from equity release might affect your entitlement to state benefits and your tax liability, including inheritance tax. There might also be early repayment charges if you change your mind, which could be expensive.
This process is when you take out a mortgage secured on the property you own (typically up to 35% of its current value), all while retaining ownership.
You can pay the interest annually to avoid it building up (which is known as an Interest-only Lifetime Mortgage); otherwise, monthly repayments will continue to roll up for as long as the loan is in place.
Upon the homeowner's passing, or if they are moved into long-term care, the amount of the loan and any accrued interest is settled using the funds from the sale of your home.
For this type of plan, you sell all or a part of your property to a loan provider. You'll receive a tax-free sum or a series of smaller regular monthly payments, all while continuing to live in your home rent-free until you die or move into long-term care.
At the end of a Home Reversion Plan, your property is sold, and the proceeds are then shared according to the final percentages of ownership.