Equity Release Mortgages
Considering releasing equity from y
Understanding Equity Release
Equity release allows homeowners aged 55 and over to access the value tied up in their property without the need to sell. This financial option can provide a tax-free lump sum or regular payments, which can be used for various purposes such as home improvements, supplementing retirement income, or assisting family members. It's important to consider all aspects of equity release before proceeding, as it involves long-term financial commitments.
- Access the value of your home without selling your property.
- Receive funds as a lump sum or regular payments for retirement, home improvements, or debt consolidation.
- Understand the long-term costs, impact on inheritance, and potential effect on benefits before proceeding.
How can we help you?
Contact us at Templar Mortgages - 0121 453 4244.
How Equity Release Works
Types of Equity Release
There are two primary types of equity release:
-
Lifetime Mortgage: This is the most common form of equity release. It involves taking out a loan secured against your home, with the loan and any accumulated interest repaid when you die or move into long-term care. No monthly repayments are typically required, and you retain ownership of your property.
-
Home Reversion Plan: With this plan, you sell all or part of your home to a reversion provider in exchange for a lump sum or regular payments. You can continue to live in the property rent-free until you die or move into long-term care. However, the provider will receive a share of the sale proceeds when the property is sold.
Eligibility Criteria
To qualify for equity release, you generally need to meet the following criteria:
Age: You must be at least 55 years old.
Property Value: Your home should be worth a minimum of £70,000.
Property Type: The property must be in the UK and suitable for the lender's criteria.
It's essential to consult with a specialist equity release adviser to determine your eligibility and explore the best options available.
Costs and Considerations
Equity release can be an expensive way to access funds, as interest accumulates over time. The earlier you take out an equity release product, the longer the loan, and the more interest builds up. It's a lifetime commitment that can affect:
Future Plans: Including care at home.
Eligibility for Benefits: Equity release may impact your entitlement to certain benefits.
Inheritance: The amount you can leave to your beneficiaries may be reduced.
Before proceeding, it's crucial to speak to a specialist equity release adviser to understand the risks and discuss other options.
Making an Informed Decision
Equity release can provide financial flexibility in later life, but it is not suitable for everyone. It's essential to consider all alternatives, such as downsizing, remortgaging, or adjusting personal finances, before deciding. Seeking independent financial advice is mandatory before proceeding with any equity release plan. This ensures that you make an informed decision that aligns with your long-term financial goals and personal circumstances.
FAQ : Equity Release Mortagge
What is an equity release mortgage?
An equity release mortgage allows homeowners aged 55 and over to unlock some of the value tied up in their property without having to sell or move out. The funds can be taken as a lump sum, smaller drawdowns, or a combination of both, while the loan is repaid when the property is sold, usually after the homeowner passes away or moves into long-term care.
How much can I release from my home?
The amount you can release depends on factors such as your age, the value of your property, and the specific lender’s criteria. Generally, the older you are and the more valuable your property, the higher the percentage of equity you can access.
Will I still own my home with equity release?
Yes, with the most common type of equity release, called a lifetime mortgage, you remain the legal owner of your home. However, the lender places a charge against the property, which is repaid when the property is eventually sold.
Is equity release safe?
Equity release in the UK is regulated by the Financial Conduct Authority (FCA), and products offered by members of the Equity Release Council come with protections such as the “no negative equity” guarantee. This means you or your estate will never owe more than the value of your home when it is sold.
What can I use the money for?
Funds released through equity release can be used for a wide variety of purposes, such as supplementing retirement income, paying off debts, funding home improvements, helping family members with property deposits, or enjoying lifestyle goals like travel.
Related Services
Expat Mortgages
