Could equity release be the answer?

Equity release is a way of releasing money from your home, without having to move or sell your property. It has often been considered the product of last resort, but times have changed and many people are now looking to unlock funds from their home.

There are two main types of equity release:-

Home reversion plan – funds are raised by selling all or part of your property at less than its market value, whilst you continue to live in your home, as a tenant, without paying rent, until you die or move into permanent residential care.

Lifetime mortgage - money is borrowed against the security of your home, by way of a mortgage, which is usually repaid from the sale of your home when you die or if you have to move permanently into residential care.

There are factors which will influence the amount you can release, such as age - the older you are, the more you are able to release. The funds are tax free and can be used for various purposes including a holiday of a lifetime, a new car, home improvements or to pay for medical costs.

Lifetime mortgages tend to be the most common type of arrangement. Unlike conventional mortgages, you do not make monthly repayments. The interest is added to the loan, therefore increasing the debt, and repaid usually upon death or moving into residential care; as the name suggests, it is a mortgage for life. They are now far more flexible and can include different types of benefits, for example, you can borrow funds for your immediate needs and also build in a reserve facility in case further funds are required at a later date. Interest is only charged on the funds which are released for your immediate needs and not on the funds held in the reserve facility.

There are many older homeowners grappling with financial challenges, having to work beyond age 65 and who also own their own homes; consequently they are asset rich but cash poor.  Many of these people are using their home as a solution to finance and enjoy their retirement.

Equity release is not for everybody and before considering this route you should consult with an independent financial adviser who holds the appropriate qualifications and is authorised by the Financial Conduct Authority (FCA). This adviser will explore the alternatives to equity release, your full financial position, and consider any State Benefits you receive to ensure that these are not affected by equity release.

For more information and to see if you are eligible, please contact me on 01206 217308 or