An equity release plan allows homeowners aged 55 or older to free up some of the equity locked in the value of their home.
‘Equity’ is the difference between the value of your property and any outstanding loans (such as a mortgage) secured against it.
You can take any equity released as either a one-off lump sum or withdraw it in instalments; we’ll explain the difference later in this guide. In either case you can spend the released funds on whatever you choose.
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How can equity release help you?
Here are some of the popular reasons for taking out an equity release plan.
Improvements to your home, such as kitchens and bathrooms, extensions and conservatories.
Holidays, family gatherings, foreign travel, cruises or tours.
To clear secured loans, the mortgage or unsecured debts like credit or store cards.
Purchases of significant items, for example motorhomes, cars or even holiday homes.
Increasing costs of living, longer life expectancy or less than expected pension provisions are just some of the reasons more people than ever are choosing equity release.
And with more providers offering attractive plans with greater flexibility, equity release has become a go-to solution for many individuals and their families. Ultimately people use it so they can improve their quality of life.
Improve day-to-day funding and/or enable early retirement.
Potential reduction in inheritance tax liability.
Helping children or other relatives with deposits to buy their own homes.
You need to take advice...
Whilst releasing equity may be the best option for you. There may be alterntives that are better suited to your personal situation. There are also alternative ways of releasing equity that we should consider. It’s important to remember that a poor decision could mean that you encounter unexpected disadvantages;
If you sell 100% of your property, there will be no property value to leave to your beneficiaries.
If you die shortly after taking out a home reversion scheme, your estate will receive less as the full market value is not given at the outset.
It’s expensive to reverse.
It may impact the size of your estate and may affect your entitlement to means-tested benefits either now or in the future.
You can buy back the proportion of your house you sold, but you would be buying it back at market value and not at the discounted rate you sold it for.
Equity Release may require a lifetime mortgage or home reversion plan. To understand the features and risks, ask for a personalised illustration.
A mortgage is a loan secured against your home. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.
For those seeking to increase their existing borrowing, alternative finance options may be available and more appropriate for your needs. For example, a further advance from your existing lender, a second charge mortgage or an unsecured loan (e.g. a personal loan). For those seeking a ‘Retirement Interest Only Mortgage’, a ‘Lifetime Mortgage’ may be available and more appropriate for your needs.
For establishing your need, undertaking research and making a recommendation, we charge a fee of £495. Our fee becomes payable when we provide you with our recommendation(s).
If you choose to proceed with our recommendation and the mortgage goes ahead, we will also be paid commission from the lender for arranging the mortgage on your behalf. The amount of commission we receive varies from lender to lender.
Take advantage of a free initial consultation so that we can show you how we can help.
Once fully understanding your personal circumstances, we will make you a bespoke recommendation.
All of our adviors are fullly skilled and qualified in personal financial advice across a number of disciplines.
We are authorised by the Financial Conduct Authority and work to their strict guidelines.