Equity release
Are you looking to release equity in your home?
If you’re over 55 and want to free up some of your wealth, an equity release mortgage can release money from your home without having to make any monthly repayments.
How does equity release work?
With equity release products, you can draw a lump sum or regular smaller sums from the value of your home, while still living there. You can then use the money however you wish, whether that’s travel, adapting your property or gifting to family.
There are two types of equity release: lifetime mortgages and home reversion plans.
Please note that some types of property are not eligible for equity release. Equity release will reduce the amount of inheritance that can be left, and can have an impact on state benefits and age allowance.
What's a lifetime mortgage?
A lifetime mortgage is a loan secured against your home. Interest is charged by the lender on the amount you borrow and this can be charged in a variety of ways including rolled up interest, fixed repayment, interest only plans etc.
With rolled up interest plans interest is added to the loan amount and can quickly increase the amount owed.
The lifetime mortgage loan is generally repaid upon your death or if you move out of the home.
Please note, there are restrictions on the amount of borrowings.
What's a home reversion plan?
With a home reversion plan you are actually selling part or all of your home whilst retaining a right to live in the property for the rest of your life. This results in a change to the title deeds.
The sale of your home to a home reversion provider will only achieve a percentage of the property’s value. You may be able to buy back the share sold to the reversion provider but note that you are likely to have to pay the full market value of the share despite it not being sold to the reversion provider at market value originally.
Upon your death, the costs of eventually selling the property will be deducted prior to the balance being paid to the estate.
How can we help with equity release?
Our “no obligation consultation” looks at your individual circumstances and equity release needs. With a range of products to choose from, and products being created regularly, we can choose the right ones to suit your needs and create your equity release plan. By seeking advice from one of our qualified professional advisers, we can ensure your equity release should have no impact on your tax position or your state benefits and age allowance. Simpson Financial Services is a member of The Equity Release Council, meaning that we adhere to their Statement of Principles when providing independent financial advice.
We will also advise you if we think there are more suitable ways of achieving your financial goal rather than a lifetime mortgage or home reversion.
Want to explore your options?
