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What Is Equity Release?
Equity release gives homeowners over the age of 55 the option to release funds from their property as either a tax-free lump sum or in the form of regular payments.
It’s like taking out a long-term loan. You can choose to make repayments, but usually the loan amount and accrued interest are repaid against the sale of the property after you pass away or enter full-time care.
What are the benefits?
Often, property is your main asset as you enter retirement. Accessing some of the money from a home can pay for renovations, long-term care costs, holidays, maintaining a stable and secure income or helping your children with their own house deposits.
You will remain the legal owner of your home, and you are guaranteed not to go into negative equity. This means you can release money safe in the knowledge that you won’t pass on any debt to your estate. There is also the option to safeguard a percentage of your home’s value as inheritance for your loved ones.
Equity release is flexible which means you can choose to receive either a one-off lump sum payment or a smaller sum with cash reserves that you can draw from.
What are the risks?
While you can safeguard some of the value of your home, the more money you release, the less you have available to leave behind as inheritance. Equity release may also affect your tax position and welfare benefits and can incur a hefty charge if you choose to end your commitment early.
Am I eligible?
A lifetime mortgage is the most popular form of equity release. To be eligible, you need to own a home within the UK and live there permanently.
Whether it’s an individual or joint application, all parties involved need to be over the age of 55.
You need to have paid off your mortgage, or plan to pay off any outstanding mortgage debt with the equity you release.
Other terms and conditions may apply. To find out if you are eligible for equity release, get in touch now!
Our qualified financial advisors will talk through your individual needs and offer personal, tailored advice weighing up the risks, benefits and costs of releasing money from your property.
They will thoroughly explore your options and help you through the application process if you decide equity release is the right choice for you.
Once we’ve arranged an independent valuation of your home, our financial advisors will be able to confirm how much money you can release.
If your application is successful, we will finalise the terms with you. Then all that’s left to do is sign on the dotted line and the money is yours to spend however you like.