Archive for the ‘Equity Release Guide’ Category
How do I know if I qualify for Equity Release?
If you are a homeowner and are aged 55 or over you could qualify for equity release, and you could benefit from releasing a tax-free lump sum or an additional regular income from your home.
Your final eligibility will depend whether your home meets the general property requirements needed for your chosen equity release product.
Releasing Equity From Your Home
There has never been a better time to consider equity release. The market is more competitive than ever before and as a result interest rates on equity release schemes are at an all time low. The right equity release specialist should be able to search the whole market to find the most suitable equity release plan for you.
What is a Home Reversion Plan?
Unlike a lifetime mortgage and drawdown lifetime mortgage where you remain the homeowner while you live there, with a home reversion plan you actually sell part or all of your property in return for an income or lump sum of tax-free cash whilst still retaining the right to live in it rent free for the rest of your life without having to make any repayments.
With a home reversion plan you don’t necessarily have to sell off all of your property, you may decide to release equity on only a fraction of your home, thus guaranteeing an inheritance to your beneficiaries. Typically home reversion plans aren’t as popular as lifetime mortgages for the reason that many people prefer to retain full ownership of their home.
What is a Lifetime Mortgage?
A lifetime mortgage is one of the most popular forms of equity release because it allows you to free up part of the value of your home without risk to losing it. You retain full ownership, the equity you release is tax-free and can be taken in a lump sum. Consequently, a lifetime mortgage would be particularly beneficial if you’re looking to raise a large amount of cash without having to worry about regular repayments for the rest of your life.
Interest is added to the lifetime mortgage over your lifetime, accruing at a fixed or variable rate. The loan plus interest is eventually repaid when your home is sold. This can be when you move into long-term care, or when you and your partner die. In the UK, you can usually release up to 50% of the value of your home with a lifetime mortgage but that will vary depending on the value of your home and your age. An independent equity release specialist will be able to advise you more.
What is Equity Release?
Equity Release is a term given to schemes that enable homeowners to free up a chunk of the capital tied up in their home without having to make regular monthly repayments. In light of the recent economic downturn a growing number of elderly homeowners are turning to equity release to make their retirement more comfortable, and to open up exciting new possibilities in later life.
An equity release plan allows you to raise money from your home as either a lump sum or regular income, or both – and at the same time you and your partner can continue living there until you both die or move out.
Is an Equity Release Loan Right For You?
As equity release loans become more widely available to homeowners aged 55+ in the UK you could be in two minds about whether to pursue a loan further – on the one hand, you’ve worked all your life to pay off your home and a loan would put you back to square one. But on the other hand, your property is your biggest asset so why not use it as part of your retirement plan and enjoy it like any other savings. Deciding whether an equity release loan is for you firstly depends on how you feel about this.
Equity Release - unlocking money from your home
The right equity release mortgage can reward you with great financial perks in retirement. If you are 55+ and your home is worth £50,000 or more then you may be eligible for a lifetime mortgage, drawdown mortgage or home reversion plan.
How Equity Release Schemes Can Improve Your Retirement
The right equity release scheme enables you to make the most of one of your biggest assets by allowing you to unlock a large amount of cash tied up in your home. With soaring living costs, people approaching retirement may be finding it increasingly difficult to enjoy life at a time when they should be most. Whether extra funds are needed for day to day living, or you need to raise a cash lump sum, an equity release scheme could be the right thing for you to consider.
