Equity release refers to a range of products that let you access the equity (cash) tied up in your home if you are typically over the age of 55. You can take the money you release as a lump sum or, in several smaller amounts or as a combination of both.
There are two equity release options:
Lifetime mortgage: you take out a mortgage secured on your property provided it is your main residence, while retaining ownership. You can choose to ring-fence some of the value of your property as an inheritance for your family. You can choose to make repayments or let the interest roll-up. The loan amount and any accrued interest is paid back when you die or when you move into long-term care.
Home reversion: you sell part, or all, of your home to a home reversion provider in return for a lump sum or regular payments. You have the right to continue living in the property until you die, or go into residential care, but you have to agree to maintain and insure it. You can ring-fence a percentage of your property for later use, possibly for inheritance. The percentage you retain will always remain the same regardless of the change in property values, unless you decide to take further cash releases. At the end of the plan your property is sold and the sale proceeds are shared according to the remaining proportions of ownership.
There are other alternative to Equity Release which would also need to be considered such as raising finance from local authority or other available grants; trading down or even selling the property and renting.
There are plenty of things to consider before releasing equity from your home as you will be reducing the amount of inheritance available for your family, so before taking a big step talk to us. We can help ensure you understand all the implications of this decision and make sure your future is as comfortable as possible with the best equity release products to meet your needs.
It is advised that customers seek Independent Legal advice before entering into a legally binding equity release contract.