Equity Release schemes are available to homeowners of pensionable age as a way of releasing cash from your home. You are free to use the cash in any way you choose be it to supplement your retirement income, or carry out home improvements, in return for giving up some, or all of the value of one’s home.
There are three types of Equity Release:
Lifetime mortgage
This scheme provides cash to the homeowner secured by a mortgage over the home. The main difference between a lifetime mortgage and a traditional mortgage is that no payments of interest or capital is paid until the property is sold following the death of the homeowner or homeowners if the property is owned jointly or where the owner or owners move into residential care on a permanent basis. At that point the loan provider must be repaid in full the initial loan together with interest which has been rolled up during the period of the loan.
Home Income Plans
This is similar to a lifetime mortgage. However the money released from the loan is used to purchase an annuity which provides you with a regular guaranteed income for the rest of your life. Some schemes allow a combination of both a lifetime mortgage and home income plan.
Home Reversion
With a home reversion scheme you are immediately selling your home to the provider on terms which allow the home owners the right to remain in the home rent free until one or both owners if the property is jointly owned die or move permanently into residential care. At that point the provider will sell the home retaining whatever share of the proceeds was agreed under the terms of the original loan. Any excess once the provider is paid in full forms part of the person’s estate.
Whatever option you decide, it is important you take specialist advice from an independent financial adviser to ensure equity release is indeed the most appropriate solution to your financial needs. Equity release is a lifetime commitment and should only be entered into after all other available options have been explored. Our team at Fisher Jones Greenwood can guide you through the process as smoothly as possible as we understand you will want the funds released as quickly as possible.
Contact
For more information on Equity Release please contact Susanne Grimwade on 01206 835217
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