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An equity release product allows homeowners over 55 to access the value in their home, either by way of instalments or a cash lump sum.
The most popular equity release product is a lifetime mortgage. You retain ownership of your home, and generally, any accumulated interest is payable only upon moving into long-term care or upon death.
Our team of experienced brokers have helped many people release the equity in their homes, and we can help you to get the best deal possible. Complete our simple online form to get started or carry on reading to learn more.
There are many types of equity release product, including various lifetime mortgages.
An alternative equity release product to a lifetime mortgage is a home reversion plan.
This involves selling all or part of your home, usually at 20-60% of market value. You continue to live in your home as a co-owner and do not pay rent. The reversion company recovers its share once the property is sold.
These products are not so popular as you are sacrificing much of the value in your home.
All applicants must be over 55, or 65 for a home reversion plan, and own 100% of your property.
The amount of equity release you are able to apply for will depend upon your age, health and the type of property. The equity release is typically capped at 20-50% of the market value of the property.
Some lenders apply a minimum amount on the application, which is usually around the £70,000 mark.
You and your partner are entitled to live in your home for the rest of your lives. Your home is secure until you go into long-term care or pass away.
Interest rates are typically higher for equity release mortgage. Bear in mind there are other costs to consider, such as valuation fees, administration fees, and legal expenses.
Our specialist advisors can help you through the process to secure the best deal possible.
One of the main benefits of equity release is that it allows you to stay in your home.
With downsizing, there are many elements to consider, including the upheaval and associated cost of moving house. With equity release, you can stay in your home debt-free.
Typically for standard applications, you can expect 8 weeks to complete your equity release. However, reversion agreements can take a few weeks longer.
Mandatory obligations include maintaining the property, maintaining insurance on the property, ensuring the property is not left vacant or rented out.
In the event of an unexpected windfall such as inheritance, you may look for a way to exit your equity release plan. You can exit an equity release plan, but your lender is likely to impost early repayment charges.
Your lender is likely to place early repayment charges.
You may be able to port your equity release plan, assuming the property value is similar, and your lender is prepared to lend on the same basis.
Some lenders may require you have a lasting power of attorney (LPA) in place when taking out equity release.
This will depend on the age and type of adverse credit on your history. Speak to one of our advisors for guidance on your application.
Possibly. Any means-tested benefits that take savings into account may be affected.
Yes, you may release equity through a lifetime mortgage to fund a second home.
Some lenders will permit you to use equity release to buy an overseas property. However, there are controls in place that dictate how long you must live in your UK home after releasing equity.
Ready to learn more? You can find a list of equity release lenders here on our site.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
IF YOU ARE THINKING OF CONSOLIDATING EXISTING BORROWING YOU SHOULD BE AWARE THAT YOU MAY BE EXTENDING THE TERMS OF THE DEBT AND INCREASING THE TOTAL AMOUNT YOU REPAY.