Equity release is a way of releasing some of the money that's tied up in your home, providing you with a cash lump sum.
You can continue to live in your home and use the money to get more from your retirement. Whether it's to top up your income, make home improvements, buy a new car or even take a special holiday - it's up to you how you spend it.
Taking a lump sum, plus the costs, will reduce the value you have in your home, and therefore the amount of any inheritance you leave. Your tax position and any entitlement to welfare benefits may also be affected.
Equity release isn't right for everyone, so it's important to understand the features and risks.
Equity Release can take the form of a Lifetime Mortgage or a Home Reversion Scheme.
Lifetime mortgages are available to homeowners aged 55 and over. The amount you can release will depend on a number of factors including your age, value of property and type of property.
A home reversion scheme allows you to sell part or all of your property to a provider in return for either a lump sum or income and a lifetime right to remain living in your property. Your home, or the part of it you sell, will then belongs to someone else, but you are allowed to carry on living in it until you die or move out and you or your estate will retain the value of any share not sold.
Whilst under these schemes you sell the ownership, you will still be responsible for the property and bills relating to it.
You can sell up to 100% of the value of your property but will only receive a heavily discounted sum of money which could be as low as 25% of the current market value at age 65 which is typically the minimum age for home reversion plans.
Peace of Mind
SHIP ('Safe Home Income Plans') was formed in 1991 in an attempt to improve the equity release market and its previous poor reputation. The SHIP guarantees include a guaranteed right to remain living in the property which is the subject of the equity release, either for life or until entry into long term care. In addition there is a vital No Negative Equity Guarantee - which essentially guarantees that the amount to repay the equity release plan on death or entry into long term care can never exceed the value of the property itself, and so no debt can ever be left behind for beneficiaries of the equity release borrower. In 2012, SHIP rebranded as the Equity Release Council (ERC) and extended its reach to Equity Release advisers as well as product providers.
The current members of the Equity Release Council include Aviva, Bridgewater, Hodge Lifetime, Just Retirement, LV=, More 2 Life, New Life, Partnership, Retirement Plus and Stonehaven.
TO UNDERSTAND THE FEATURES AND RISKS ASK FOR A PERSONALISED ILLUSTRATION. AN EQUITY RELEASE PLAN WILL REDUCE THE VALUE OF YOUR ESTATE, WILL NOT BE SUITABLE FOR EVERYONE AND MAY AFFECT YOUR ENTITLEMENT TO STATE BENEFIT
Professional Mortgage Services does not advise on lifetime mortgages and equity release for the over 55's but has partnership arrangements with specialist equity release brokers and if you require further assistance will be happy to introdfuce to our equity release associates.
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