How much can I borrow with Equity Release?
How much you can borrow depends on your age, health and your property value,
What is the difference between a Lifetime Mortgage and a Home Reversion Plan?
A lifetime mortgage is an interest only mortgage that runs until you either sell your property, move into care or pass away.
With home reversion plans, you sell part or all of your home in exchange for a lump sum of money and the right to live in it.
With a lifetime mortgage you retain ownership of your home.
A lifetime mortgage has a fixed interest rate is agreed at the time you take out the plan. This interest builds up as compound interest over the years and is added to the loan or you can choose to make full or partial interest payments and even pay off capital, subject to limits.
With home reversion plans there is no interest to pay as it is technically not a loan. However, if your property increases in value, you will only benefit from the increase in the value of the portion of your property you still own.
If I take out an equity release scheme, do I risk losing my home?
No. Lifetime mortgages have a No Negative Equity Guarantee, the amount of money you borrow against the value of your home, plus any added interest can never go above the value of the property.
What can I use Equity Release for?
You can use the money released for almost any legal purpose, typically we see the funds used for home improvements, helping the family, medical expenses.
Can I use Equity Release like a mortgage for a new home?
Yes, you can use a Lifetime Mortgage to help purchase a new home, how much you can borrow depends on your age and the property value.
Will I pay tax on the money released?
No the funds released using equity release are tax free
What impact will Equity Release have on my family?
Taking out an equity release plan could leave your family with little or nothing to inherit from your property. You need to be comfortable with this possible outcome and may wish to discuss it with them before committing yourself. You may also want to consider including your family in any discussions you have with your financial adviser or your solicitor.
If you are considering releasing equity from your home to help younger family members get on the property ladder or pay for school or university fees etc. you need to consider the implications of releasing the equity now as it will not be available later should you need it for other purposes.
How do I qualify for Equity Release?
Lifetime mortgages are suitable for individuals or couple who own their own home which is their main residential property and are aged 55 or over. If you are taking out the plan with your partner, then the age of the youngest borrower must be at least 55. A valuation will form part of the application process to establish if the property is suitable as security.
Equity release is not based on your income, outgoings or credit record, lenders look at the value of your property your age and your health to decide how much they will lend.
