Equity Release

What are Equity Release and Lifetime/Retirement Interest Only Mortgages? 

Equity Release is a fantastic solution that allows you to unlock cash from the value of your home by way of using a Lifetime Mortgage product. These products allow you to secure up-front finance without the need for regular monthly repayments, unless you want to. So you don’t have to move house or downsize.  

The loan is secured on your property. It’s only paid back when you pass away or if you go in to long term care. You can then enjoy a comfortable retirement. It usually only takes about 8-12 weeks to release the tax free funds for you. 

The older you are, the more money you can borrow from your property. If you satisfy those three points below, you can release money, tax free, from your home for any purpose you need. You can have financial freedom! 

• You need to be 55 years old or over. 
• Your property needs to be valued at £100,000 or more. 
• You are releasing a minimum of £10,000 

There are different Lifetime Mortgages available, such as drawdown and interest repayment, lump sums or enhanced products. When the plan ends, your home is usually sold and the loan repaid.  

The older you are the more you can borrow. You can never owe more than the value of your property, ‘no negative equity guarantee’. This means that you cannot pass on any equity release related debt to your beneficiaries. Any equity left in your property when your plan ends, can be passed on as inheritance to your loved ones. 

You still own your home and whether you want to improve your home, help your family e.g., with kids' tuition fees or a deposit on a new home, enjoy more holidays, pay off loans and debts or simply have some extra money – Equity Release is designed for you.  

You choose if you release this lump sum all at once, or in stages to reduce the interest accrued on the loan. If you wish, you can make monthly interest repayments to reduce the amount you owe or make sure it doesn’t increase. This is totally optional. 

Your lifestyle and medical history is taken in to account and this could mean that you may qualify for an enhanced Equity Release plan, making a higher lump sum available. Even moderate health conditions mean you could qualify for an enhanced plan. You need to mention this with to our Equity Release advisers if that’s the case. 

Peace of Mind - Equity release - Lifetime Mortgages are regulated by the Financial Conduct Authority (FCA), whose aim is to make financial markets work well so that consumers get a fair deal. This is achieved by securing an appropriate degree of protection for all consumers, protecting and enhancing the integrity of the UK financial system and promoting effective competition in the interests of all consumers. 

Other Options are available e.g. Retirement Interest only Mortgages (RIO)

This Equity Release product is aimed at older borrowers who may find it difficult to get a standard residential mortgage or just have mainly pension income. Borrowers who secure a Retirement Interest Only (RIO) mortgage take a loan out against their property and are only required to pay back the interest on a monthly basis. 

You are only liable to pay back the loan when the property is sold, you move into long-term care or you die. To be eligible for Retirement Interest Only funding, you only have to prove that you can afford the monthly interest repayments. This type of Equity Release is generally cheaper than using a Lifetime Mortgage product and may be the best solution for you. 

Although the eventual sale of your property will be used to repay the loan, it is likely you’ll be left with equity to pass on as inheritance to your loved ones. 

Working out which type of Equity Release is right for you can be difficult and time-consuming, which is why using us as your adviser can help you to work out which route is best for you. Our job is to make sure you look at all your possible options, including downsizing or utilising other forms of borrowing. We will give you all the information you need to make the right decision about your future finances and there’s no pressure to go ahead. 

Some Points to consider:

• You will still own your own home 
• You will not end up owing more than your home is worth 
• You will not need to make monthly repayments unless you choose to 
• You can still release equity even if you have a mortgage
• You can remain in your property until you and your partner pass away or are moved in to long term care 
• You can move home if you wish 

Call us today at 0800 0903051 for a free, no-obligation consultation to discuss the best options based on your situation.