Equity Release
Equity Release allows homeowners aged 55 and over to release tax-free cash from the equity built up in their home. The amount you can release is based on your age, health and how much your home is worth. Depending on the equity release product chosen, you can draw your money as one large lump sum or as a series of smaller lump sums.
Lifetime Mortgage
A lifetime mortgage is the most popular form of equity release. It is essentially a loan secured against your home, which allows you to release money as a cash lump sum or a regular income over a fixed term. With a lifetime mortgage the homeowner borrows a percentage of the value of thier property.
Depending on the plan and the chosen lender, interest may or may not be payable throughout the term of the mortgage. As with any mortgage, ownership of the property does not change. There is no specified repayment date; the debt is repaid when the last surviving borrower moves house, goes into long term residential care or dies.
Most lenders offer a ‘no negative equity’ guarantee, providing the house is sold for the best price reasonably obtainable. This means that the lender will not seek possession or full repayment if the loan plus interest exceeds the value of the property. If the sale proceeds on death are not enough to pay off the debt, the lender will write off the deficit.
Lifetime mortgages can take three main forms:
Interest Only – where the borrower is required to make payments of interest to the lender each month. The loan is repaid when the borrower moves, goes into residential care or dies.
Interest Roll-Up – where the mortgage is on an interest only basis, but the borrower makes no payments to the lender. The interest charged is rolled up into the loan, with the original loan plus acccured interest paid when the borrower moves, goes into care or dies. This form of lifetime mortgage means that the debt increases over time.
Hybrid – where the borrower is permitted to convert from an interest only basis to a roll-up basis at anytime during the mortgage term.
What can equity release be used for?
• Pay off your current mortgage
• Boost your disposable income
• House deposit for children
• Purchase a new property
• Funding at home care
• Home improvements
• Inheritance planning
• Debt repayment
• Holidays
• Purchase an investment property
• Help with regular bills
• Social care costs
• Purchase a holiday home
• Purchase an investmet property
• Gifting to family & friends
• New car purchase
• Divorce settlement
• and much much more
Contact Us
If you have any questions, require help and advice or wish to book an appointment, please call us on 01375 678833 or 07746 534448, alternatively send us a message using the contact form below. We aim to reply within 2 business hours.