Your home may be repossessed if you do not keep up repayments on your mortgage
Equity Release will reduce the value of your estate and can affect your eligibility for means tested benefits
People want a lot more from their retirement these days. Gone are the times when retirement meant just tending the allotment or knitting endless jumpers for the family. Most people look forward to the freedom that retirement brings only to find the realisation that along with giving up work, also comes less disposable money to do the things you really want to.
That’s where an equity release loan or life time mortgage can help.
Equity release (often now called a ‘lifetime mortgage’) is where you release cash (equity) tax free from your home or ‘buy to let’ property to use for almost any purpose. This can be in the form of either a lump sum or as an income each month and is available to home owners aged 55 and above. Many now give you the choice to either pay the interest on the loan each month to keep the loan the same, or to have the interest ‘rolled up’ meaning no payments need to be made, but instead the loan increases with the interest over time.
Equity release is not only about releasing ‘cash’ from your home but can also be used to purchase a new property or to repay an existing mortgage that is already held.
Equity release used to come with some very scary stories of people taking out these loans only to realise they could not pay them back without significant penalties or worst yet, not realising they had actually sold their home to the ‘lender’ for a fraction of its worth, again with no way of ‘undoing’ this arrangement… Thankfully, much has changed since then, and many of the products now available benefit from flexibility in the future should your circumstances change. The majority of these products also offer interest rates that are fixed for the life of the loan, enabling you know exactly what you will owe and when. An alternative to equity release is a ‘home reversion’ scheme.
This is where you can sell all, or part of your home to the provider in exchange for a cash lump sum. In return, they offer a life time ‘tenancy’ to stay in your home until you die or move into long term care. These types of plans need a lot of careful consideration and are not something to be done without the correct guidance and advice. Although these types of plans can be suitable in some cases, they do not offer the flexibility to change your mind at a later date so come with some very high risks.
There are more and more providers offering different types of equity release loans and home reversion schemes to suit a wide array of circumstances and this is where we can help.
We offer face to face advice either in our offices located around the southwest, or in the comfort of your own home. We take the time to fully understand what it is you want to achieve both in the short term and long term and do so in plain English, without all of the jargon. Only once we have this full understanding do we research the whole of the market to enable us to provide you with a tailored personalised recommendation designed to suit you.
There is no cost for the initial meetings, and we will always spend as much time as needed to make sure you are happy and fully understand the product you take is right for you. We would always welcome other family members to be involved in the process as well, should you wish, to make sure they too understand how these loans work.
If you would like to find out how you can gain more financial freedom, or just have some questions, please feel free to call us or click below for your free information pack.
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