How do I qualify for an Equity Release
plan?
The criteria varies between providers but as a
general rule schemes are available for homeowners aged 55 and above. You must
own your own home and paid off any previous mortgages or be prepared to clear
the existing mortgages from the proceeds of the equity release plan. Your
property must have a minimum value and be in a reasonable state or repair.
How do I know which plan is best for
me?
It is essential you take specialist advice from
an Independent Financial Adviser who will go through your personal circumstances
and advise on the most appropriate product to suit your individual needs.
Why do I need an independent solicitor to
advise me?
It is a requirement that you take independent
advice from a solicitor who is not connected with the provider themselves.
Whilst the providers of equity release will have their own solicitors preparing
the documentation it is essential you instruct an independent solicitor who can
advise you on the paperwork and request the funds on your behalf. The
specialist team at Fisher Jones Greenwood can take you through this process as
smoothly as possible.
How much money can I raise?
This depends on your age and the value of your
property. The older you are the higher percentage you can borrow. On average
this can be between 20% and 50%.
Will I still own my home?
With lifetime mortgages you will continue to have
full ownership of your home. The lifetime mortgage provider takes a legal
charge over your home similar to a traditional mortgage. The main difference
being you do not make any repayments until your death or if you move into
residential care permanently. If however you opt for a home reversion scheme
the percentage of ownership purchased by the home reversion company transfers to
them. If for example the home reversion company purchases 50% of your home you
retain a beneficial interest in the remaining 50% of your home that you own.
How much will I owe at the end of the
plan?
When your property is eventually sold the
provider will take the original loan amount together with interest that has been
rolled up over the loan period. As long as the provider is a member of the SHIP
scheme (Safe Home Income Plan) you will never owe more than the sale value of
your property.
Will my children still receive an
inheritance?
This will depend on the value of your home when
it is sold compared with the amount outstanding under the lifetime
mortgage. It is possible to have a protected inheritance
option which will enable some cash to pass on to your children on death.
Will Equity Release alter my inheritance
tax liability?
For inheritance tax purposes the equity release
plan will be treated as a debt against your estate which will in turn reduce
your inheritance tax liability.
I am in receipt of benefits will this be
affected by taking out Equity Release?
The simple answer to this is any benefits may be
affected. For this reason you should check with the benefits agency before
proceeding.