Equity Release

If you're a homeowner and 55 or older, it's likely that your property is either mortgage free or close to being paid off. It may also be the case that the value of your home has risen considerably since it was purchased, giving you substantial equity (the difference between what you owe on a mortgage and the market value of your home).

However, you may find yourself in the position of having little income or accessible money to spend. Also, you may not want to sell your home and move to a smaller, cheaper property to raise money.

Equity release is a way to raise money against the value of your home, without having to move out of it. This is done through either taking out a loan secured against your home, or selling a part of your home, in return for a regular income, a lump sum, or a combination.

There are two main types of equity release schemes:

Lifetime Mortgages

Currently the most common way to release equity from your home whilst in retirement, without moving home, is by taking out a lifetime mortgage. The mortgage is then repaid following the sale of your home, when you either die or move out of it, for example into a care home.

Home Reversions

This involves selling either a part or all of your home to a third party (normally an individual or a specialist reversion company), in return for a regular income and/or a lump sum cash payment. You continue to live in your home for as long as you wish.

There are many factors to consider with equity release schemes, and it is always best to get specialist financial advice.

To discuss this further, please contact us to arrange an appointment.

It is important that with Lifetime Mortgages and Home Reversion Plans that you fully understand the features and risks, and ask for a personalised illustration. It is advisable that you seek specialist financial advice in order to fully understand all of the implications that taking out a Lifetime Mortgage or Home Reversion Plans would have.