Equity release is a way to obtain money quickly by releasing it from the value of your property. You will lose ownership on a proportion of your property but will still be able to live in it. Read on to find out how to release equity in your home and see if it is the right option for you.
Why should you release equity?
Equity release may be a suitable option for you if you are looking for immediate cash without having to leave your house. It may also be an option to consider if you don’t have many savings and do not intend to leave a large sum of money behind in your will.
We’d advise you speak to a specialist adviser before opting for equity release and make sure you fully understand the details of opting for this mortgage option. The interest rates on an equity release arrangement may be higher than a standard mortgage arrangement, so you should consider all options before agreeing to one.
How does equity release work?
There are a couple of equity release schemes available and you should consider all options carefully before committing to one. One of the following home equity release options may be suitable for you:
A Lifetime Mortgage is aimed at homeowners over 55 years old who are looking to borrow money and remain living in their property. If you choose this option, you will only need to pay your money back when you die or go into full-time care.
A Home Reversion Plan is suitable for people over 65 years old who are looking for a way to raise money. If you opt for this, you will sell your property in return for tax-free cash – between 20% and 60% of its market value – but can continue to live there. You then continue to live in your home as a tenant without paying rent, providing you keep the property well maintained and take out building insurance.
Equity release considerations
There are a few things to consider before opting for an equity release:
- Your property will not immediately be handed over to your beneficiaries when you die. However, you can protect some of the property’s cash value to use as an inheritance.
- If your circumstances change after agreeing to an equity release, you may not be able to rely on your property if you need money later on in your retirement for medical emergencies or other events.
- You may find the benefits you are entitled to change after releasing equity from your home, as this will be viewed as a change in income.
Get advice today
If you are looking to release equity in your property and raise some much-needed cash, call one of our expert advisers today on 0800 197 0504 or apply for a mortgage