Equity Release

Release Tax Free Cash From Your Home

For home owners over the age of 55, equity release offers you a way to unlock the value of your home to raise money.

Equity Release nowadays is a Lifetime Mortgage, an interest only mortgage with no fixed term, so you maintain ownership of your home but the Equity Release Lifetime Mortgage is paid off when you either pass away or move into care.

You’re not required to make monthly repayments but the Lifetime Mortgage will eventually have to be repaid – with interest.

Modern Equity Release plans can allow you to make payments to pay off capital or service some or all of the interest accruing.

Its important not to borrow more than you need to avoid unnecessary interest but you can set up a cash reserve for the future to be drawn down when needed.

It is important that you seek Independent Legal advice before entering into a legally binding equity release contract, we will help you find a suitably qualified solicitor for this.

Why do people consider Equity Release?

• To provide an additional income in retirement
• To move home
• To provide lifetime gifts to relatives
• For home improvements
• For holiday home purchase
• To fund long-term care
• You may have other ideas – there is no restriction on how you use the funds.

However, since equity release can be an expensive way to raise money when taking into consideration payment of arrangement fees or interest, you should also consider the following:

A smaller home

If your family have grown up and they are off on their own financial journey now, your current home may be too big for your needs and you could consider something smaller and more economical to run. In this case, you could consider purchasing a smaller property, leaving you with a lump sum on completion.

A Retirement mortgage or Retirement Interest Only Mortgage (RIO)

If can afford the monthly payments from your income this could offer lower interest rates.

Your Savings & Investments

If you have savings or investments you may wish to consider this alternative before Equity Release.

Family Assistance

Could your children help? Sometimes families would rather help you financially rather than see the family home mortgaged.

Rent out a room

If your house is sufficiently large you might consider renting out a room to bring in regular extra income.

Sell your home and live in rented accommodation

This option involves selling your house and investing the proceeds in income-producing investments. The income from these investments is then used to rent a property and for your living expenses. You would only really be able to generate sufficient income to live on if your property was sold for a large sum of money.

Benefits entitlement

Have you checked to see that you are getting all of the benefits you are entitled to? It may be that you are entitled to benefits that make equity release unnecessary. Also, equity release could affect your entitlement to means-tested benefits so it’s worth speaking to your local authorities to consider these areas first. They may be able to offer you grants or assistance with essential home improvements and alterations that you would otherwise pay for yourself.

Means Tested benefits include:

• Pension Credit
• Jobseeker’s Allowance
• Income Support
• Income-related Employment and Support Allowance
• Universal Credit
• Council Tax Support

Equity release has to fit with your needs, circumstances and preferences, where the benefits need to outweigh the drawbacks and be more suitable than alternative methods of raising funds.