Equity release can help you get access to your home’s monetary value, and ultimately make your retirement a lot more comfortable financially.
You can choose to receive monthly pay-outs from your scheme, or one larger lump sum. The money is derived from the value of your property.
With an equity release scheme you can access money from your home’s value, without having to sell it.
If you are aged 55 or over, you can apply for a scheme to hopefully one day get your hands on some of the equity (cash) that is linked to your property. This money can go toward any debt repayments that you would like cleared, or perhaps you’d simply like more money to thoroughly enjoy your retirement.
What types of equity release schemes are there?
There are two main types of schemes to consider before committing. Each scheme differs in big ways regarding your home and how much of it you own. So think carefully and look at all your options first.
With this mortgage, you are able to take out a loan from some of your property’s value. Usually you won’t need to pay any of the amount back until you either sell your home or die. You can usually borrow up to 60% of the value of your home. You will pay interest on the amount you receive, so be aware of this when deciding how much you’d like to borrow. Interest is also not usually paid during your lifetime. Instead, the interest is “rolled up” over time and repaid when you die, however the interest can increase quickly throughout your life. You can get a lifetime mortgage when you are aged 55 or older.
With home reversion, you can choose to sell a share of your home to the provider of the scheme. However it will be sold to them for less than the current market value. This doesn’t mean you need to move out of your home or sell it completely; you are within your rights to stay living in your home for as long as you wish. You could even stay living in your property until you die. It is not until you decide you leave your home that you will see the effects of the scheme. When your home is sold, whether that’s because you have passed away or moved into sheltered accommodation, the provider of your scheme will receive a share of your property’s value. However much you originally sold (for example 30% of your property) is how much the provider will receive once it is sold (30% of the profits). You can access a home reversion scheme if you are aged 65 or older.
How can equity release benefit me?
Equity release could be the key to a wealthy and comfortable retirement.
If you find that your pension isn’t going as far as you’d hoped, you can access these crucial funds that could help towards a better way of life. You could use the extra money for the more fun and pleasant things in life.
It could help your family and loved ones.
The money you receive could do great things for yourself and for your family and loved ones. If you have any dependants, this money could be put toward their education or better living standards. If you intend on leaving your home to your loved ones after you’ve gone, you may want to give them something to enjoy now, rather than waiting until they can see the rest of the value from your home later.
It could help toward paying off any debts.
If you have any looming debts that you want rid of, the money you borrow could help put your worries to rest. Rather than get behind on any debt repayments, or worry about not paying off the debts in your lifetime, you could pay them all off sooner rather than later with the money you receive.
You can remain in your home.
Just because you are selling a share of your home, this doesn’t mean you are any less entitled to live comfortably in your property. You can stay in your home for as long as you wish without any stress.
How much does an equity release scheme cost?
Equity release schemes can be costly, so it’s wise to talk to a financial expert to get the right advice. The rates for lifetime mortgages are high compared to regular mortgages so it’s best to compare your options before making any big decisions.
How can I get equity release?
You first need to find out if you are eligible for equity release. Depending on your chosen scheme, you need to be at least 55 or 65 years of age to qualify. You also need to be the homeowner.
Once you know that you qualify, you should discover your home’s worth so you know how much you can release. You can do this thoroughly with a surveyor, or you can get a close estimate through an estate agent or by looking at local, similar houses and their value.
When you have an idea of your home’s value, you can then start the process of looking at the various schemes and mortgages available. By using our website you can find a number of trusted providers who can help you on your way to access some money from your home. Compare all of the deals and pick the best one for your needs.