Equity Release also known as Lifetime Morgage sis a means of using the value of your home to receive either a lump sum of cash or regular monthly instalments.
There are two main types of equity release:
- A Lifetime mortgage
- An equity release home reversion plan.
In both instances, age is the primary factor in determining the percentage of the value of your home that can be released.
A person of an older age can release a higher percentage of the value of their home, than a person of a younger age, as they are not expected to live as long.
There is no maximum age limit for equity release, although applications are not usually granted for anyone under the age of sixty.
Important factors to consider:
- Equity Release is regulted by the government
- When choosing an equity release plan, ensure that it has negative equity guarantee. This means that in the event of the value of your property decreasing, the debt will also decrease, in addition, this will ensure that any outstanding debt, after the sale of your property will not be passed on to your next of kin.
- Not all lenders will allow you to move home after you have taken out an equity release plan.
- If you are living with a partner, you must take out a joint plan to ensure that the debt will only be reclaimed after the death, or admittance into long term care, of the last surviving partner.
- There can be hidden charges, such as; legal fees (as a solicitor is needed to set up the equity release plan), you will be charged for the surveying of your property. There are also charges for the setting up, maintenance and redemption of the loan.
- You retain full ownership of your home until your death or admittance into long term care.
For equity release advice we can be paid by commission or a fee of £750