So how do you release tax-free cash from your property wealth to enjoy what you want to do?
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.
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.
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, all 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.
Your Advice Process
Your advice process, if it results in an application will typically involve two meetings.
At the first meeting all your questions will be answered. You will also get a booklet entitled ‘Equity Release – what you need to know’ and you will be given the statutory documentation.
If you do need my help I will need to know what your plans and priorities are and understand your financial circumstances. Your family, or anyone else of your choosing, are welcome to attend the meetings.
If Equity Release is right for you I will present my recommendation at a second meeting and explain it to clearly to you. 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 monitor the application until you get your money.
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.
Use our handy calculator to find out how much you could release
Age of youngest borrower
Property Value
You may be able to borrow:
£