What is Equity?
Equity is your current mortgage balance taken away from the current value of your home. For example if your mortgage is paid off and your home is worth £200,000 then your equity is £200,000. Equity Release should not be confused with a remortgage although it can be used to pay off an existing mortgage.
What is Equity Release?
Equity Release allows you to access the tax free cash tied up in your home. You can raise capital either for income or a lump sum purchases for a variety of reasons.
How Old Do I Have to be to Qualify For Equity Release?
Equity release is available to those aged 55 or over and who owns their home. The older you are when you take out equity release, the shorter the time you are expected to live. This means you can normally expect to release a larger sum.
Do I Still Have Monthly Repayments?
If you take out a lifetime mortgage you’ll have no monthly repayments unless you choose them. Normally the interest rolls up, and is repaid either on death or sale of the property. It is also possible to make voluntary payments towards the outstanding amount.
Does My Health Affect My Equity Release?
Some providers may offer a higher amount of cash which can be released if you’re in not such good health. This is called “Enhanced Equity Release”. This is because your life expectancy may be reduced and therefore the expected term of the loan will be shorter and less interest will be rolled up.
I have an interest only mortgage - can you help?
Yes quite possibly. Many older people who still have an interest only mortgage find equity release helpful. If you have an interest only mortgage coming to an end then equity release can be a useful solution. It can pay off the existing mortgage provided you meet the usual criteria and would mean that you do not need to make monthly payments going forward. You may even be able to release additional funds to spend how you wish.
I'm In Debt, Can I Still Qualify For Equity Release?
Yes, equity release can be a really useful way to reduce debt and substantially increase retirement income. In fact Stepchange, the highly respected debt charity, often suggests equity release to over 55s in debt as a way to repay loans and credit cards. This has the effect of increasing the amount of your income available for other things.
Why would I want to release the equity in my property?
To provide a lump sum – Many people choose this option to give themselves extra spending power for things such as holidays, home improvements, new car or caravan, gifts to children, medical or care fees or as well as clearing loans and credit cards.
To provide extra income – For some people equity release substantially improves their quality of life by using some of their equity to provide additional income. This can either be done by using one of the specialist schemes that provides an income for life, or alternatively by releasing cash in smaller stages to provide a top up to your income.
Your Equity Release quotations will be provided by an experienced equity release adviser authorised and regulated by the United Kingdom’s Financial Conduct Authority (FCA).