There are basically two types of equity release; Lifetime Mortgages and Home Reversion plans. Both of these products are regulated by the Financial Conduct Authority. By releasing equity, a home owner can draw down a lump sum or regular smaller sums from the value of their home, while remaining in their home.
Releasing Equity can play a crucial role in funding your retirement and the flexibility and safeguards which are built into the plans that complies with the Equity Release Council product standards enables thousands of home owners every year to tap safely in to their housing wealth without having to worry about making monthly repayments.
If you’re thinking of releasing equity from your property then you need to find out as much as you can about all of your available options and weigh up the pros and cons fully before you decide if equity release is right for you. A fully qualified financial adviser will be able to help you to understand the steps involved and talk you through all Your Equity Release Options.
They can also explain the possible effects this might have on any benefits you may receive as well as tax and your obligations, as well as explain the full benefits and the process of equity release. Done correctly, equity release should have no impact on an individual’s tax position or their state benefits; however each individual’s circumstances need to be carefully assessed.
Lifetime Mortgage.
A lifetime mortgage is effectively a type of mortgage which doesn’t require making monthly repayments, but with some plans you can opt to make payments rather than compound the interest. The loan and the compounded interest are then settled by your estate either when you die or go into long term care. If you are part of a couple then the repayment isn’t made until the last remaining one of you dies or goes into long term care which means that are free to remain in your home for the rest of your life.
Home Reversion Plans.
Home Reversion Plans also allow you to access some or all of the value of your property, without repayments for the rest of your life. With a Home Reversion Plan the provider will buy all or part of your property by taking into account your age and your health. It will provide you with a tax free lump sum or regular payments.
It will also come with a lifetime lease which guarantees you every right to stay rent free in your own home for the rest of your life. There is no interference and no restrictions on treating the home exactly as it was before the Home Reversion Plan, a private home to reside in freely.
With so many different deals available, only speaking to one lender means you’re unlikely to end up with the best option. Our equity release advisors have access to the whole of the market, including products not available from high street lenders.
We work for you not the lender and will act solely in your best interests. You can therefore be confident that the equity release product we recommend will be the best available product to suit your circumstances.
At Your Mortgage Options we leave no stone unturned in our whole of market research. We also handle the whole process end to end including all of the paperwork, to ensure a smooth and hassle-free experience.
We take the time to understand your individual circumstances. This helps us to find the right equity release deal that works for you. Whatever your aims are with equity release, we can help you to reach that goal.
This will depend on your unique circumstances. Determining factors include the age of the youngest homeowner, the value of your property and whether you have any pre-existing health conditions.
Always keep in mind, the more you borrow, the more interest you’ll be charged and the more you’ll need to repay. If you are releasing equity for a certain purpose such as to fund a second home, or perhaps to pay off debts, you should only initially release the amount you need.
Speak to an equity release advisor to find out how much you could release, and whether this can fund what you’re trying to achieve.
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According to the Equity Release standard, you have the right to remain in your property for either for the rest of your life or at least until you need to be moved into long-term care, provided the property remains your main residence and as long as you abide by the terms and conditions of your contract with the provider.
It depends upon your specific circumstances and there is no “one size fits all” best provider. At Your Mortgage Options we ensure that we put your requirements and circumstances first and explore all Your Mortgage Options when looking into Equity Release.
Generally borrowers must have at least 20 percent equity in the property to be eligible for a refinance or loan, meaning a maximum of 80 percent loan-to-value (LTV) ratio of the house’s current value.
Yes, you can. But you must repay your outstanding mortgage balance first. Put simply, Equity Release must be the only charge registered against your property.
Yes, any funds received from Equity Release can affect your entitlement to means-tested benefits such as Pension Credit, help with certain health costs and Council Tax Support – which is the scheme to help with paying council tax in Wales.
Currently, most of the traditional high street banks such as Natwest, Lloyds, Barclays and Santander do not offer equity release … The current range of equity release schemes offer the most diverse range of plans and competitive interest rates the market has ever seen which is why it always best to speak to a whole of market independent specialist about every option you have available to you and which suits you best.
You can figure out how exactly much equity you have in your home by subtracting the amount you owe on all loans secured by your house from its appraised value. e.g, if someone owes £150,000 on their mortgage, and the property is valued at £400,000. Their equity is £250,000.
Yes. When considering Equity Release, it is a requirement to have a face-to-face discussion with a solicitor before taking out a plan, as per the rules from The Equity Release Council.
Equity Release provides you with either a cash lump sum or regular income. The “catch” is that any money released will still need to be repaid when you pass away or move into long term care.
