The difference between a property’s current value and any outstanding loans is ‘equity’, such as a mortgage, secured on it.
Equity allows you to take some of the value stored up in your home either as a lump sum or gradually as a series of withdrawals over a number of years without the need of moving house or downsizing. It is potentially available to anyone who owns their own home in the UK over a certain value and if you are aged 55 years or older.
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 are paid back when you die or when you move into long-term care.
Home Reversion: You sell part or your entire home to a home reversion provider in return for a lump sum or regular payments. You can choose to continue living in the property until you die, rent free, but you have to agree to maintain and insure it. You can also put a limit on the 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; however you can decide to change it if you want to release more cash. At the end of the plan your property is sold and the sale proceeds are shared according to the remaining proportions of ownership.
To understand the of equity release, we recommend that you take independent advice from a professional and look at all the other options available to you.
We provide a nationwide consultation option anywhere in the UK if you prefer. However, most transactions do not require this and we will be happy to do all the work via phone, email and internet. You can be assured that providing a great service is at the heart of what we do whichever way our clients prefer to do business with us.