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What is Equity Release?
It is a tax free way of unlocking some of the value in your property. We do this by way of a Lifetime Mortgage. We do not do Home Reversion Plans – this is the one where you lose title to your home. With a Lifetime Mortgage you continue to own your home and can continue to live in it until you die or go into long term care.
What is a Lifetime Mortgage?
Just like a traditional mortgage, the lender has a charge on your property. However, there some important differences to a traditional mortgage.
There is no fixed term to the agreement. The mortgage remains until the last party passes away or goes into long-term care. From this point the lenders would like their money back which usually comes from the sale of the property, but it can be paid back independently.
You do not have to make repayments. If you do not make repayments the interest will ‘roll up’ and be compounded. However, many plans come with the feature where you can make ad-hoc or regular payments. This can slow down or prevent the roll up of interest or even start to part-repay the mortgage.
You do not have to take all the money at once. There are plans available with a ‘drawdown’ facility. An amount is put aside in addition to the initial sum and this can be used in future to meet your needs by drawing down the funds required. The benefit of this is that you only pay interest on the funds that you have used.
Most borrowers choose a fixed rate and if so, this is fixed for life. This enables you to see how much you will owe at any time in the future. Capped variable rates are available but rarely chosen.
Making sure you are safe –
The Equity Release Council
All our products meet the standards laid down by our trade body, the Equity Release Council. They are:
You have the right to stay in your property for life or until you move into long term care (provided you do not break the terms of the mortgage)
You have a right to move and take the mortgage with you. (subject to property eligibility)
There is a ‘No Negative-Equity Guarantee’ – this means that when your property is sold, even if there is not enough left to settle the mortgage neither you nor your estate will be liable for the shortfall.
Fixed interest rates must be fixed for life.
In order to take advantage of the Equity Release Council guarantees, you must take independent legal advice when taking out the mortgage.
Making Sure you are safe –
The Financial Conduct Authority
Advisers must be regulated by the FCA. Our registration number is 566220
Making sure you are safe –
The Financial Services Compensation Scheme
We are covered by the FSCS. You may be entitled to compensation from the scheme if we cannot meet our obligations. This depends on the type of business and the circumstances of the claim.
Mortgage advising and arranging is covered up to a maximum limit of £85,000.
Choose an independent adviser who is a member of the Equity Release Council and who is regulated by the FCA. Check websites such as Unbiased.com for references and reviews. Ask your adviser they are offering products from lenders across the whole of the market. They may only have lenders from a restricted panel or maybe even be tied to just one particular lender.
Different lenders have different product offerings with different features and benefits. The only way to be sure that you are getting the product closest to meeting all your requirements is to deal with a whole of market adviser.
Our Lenders are:
Is Equity Release right for you?
During the advice process I’ll be asking you the questions to determine exactly that. Equity Release isn’t right for everyone and if it isn’t right for you, I’ll not recommend it. But ultimately I should be able to put you in a position where you are informed enough to make your own mind up. There will be no pressure.
Together, We will look at the alternatives to Equity Release. These will include downsizing, borrowing money by other means and looking at the other products available in the Later Life market, such as Retirement Interest-Only mortgages. You may also be eligible for State Benefits or Grants to help you achieve what you’re looking for. Of course, you may decide to remain exactly as you are, and that’s fine too.
The Advice Process
The Advice Process, if it results in an application to a lender, will involve at least two meetings.
During the first meeting I will answer your questions and explain all about Equity Release and furnish you with the declarations and statutory requirements. If I am to help you I will have questions for you too as I will need to understand what your plans and priorities are, and know about your financial circumstances. Your family or anyone else of your choosing, will be welcome to attend any of the meetings.
If Equity Release is right for you there will be a second meeting where I will present my recommendation and explain the reasons behind it. Again, you will be welcome to have friends or family present. You will then be free to decide what you do next. If you want more time to think then that’s fine, if you want to apply for a lifetime mortgage then I will deal with the paperwork and guide you through the process.