What is an Equity Release Mortgage?
Equity Release is a way of using your property to generate income, with the benefit of not having to downsize. This works by giving you the opportunity to unlock the equity in your home in the form of a tax-free lump sum, or payments over a period of time.
What is Equity Release?
An equity release mortgage or lifetime mortgage as it is also known, allows you to access some, or all of your home’s value in cash without having to sell your property. With equity release you unlock tax-free cash which is released as a lump sum.
The process of releasing equity means that you can continue to live in your home while also using the money you release to supplement your income, gift early inheritance, or pay off debts for example. With an equity release product, typically, the amount extracted from the value of your home is repaid after your death or when you sell your property.
As the name suggests Lifetime Mortgages were designed to run for your lifetime with no monthly repayments. The interest rate is charged on the amount you release, and this is normally fixed for life. Equity Release Mortgages are only available to those aged 55 or over and are repaid after you die or move. Read on for more equity release tips.
Deep Dive into Equity Release
Equity release is a way for homeowners to access the equity in their property and convert it into cash. This is usually done by taking out an equity release mortgage or by selling a percentage of the property to a third party. The money released can be used for any purpose, such as home improvements or to supplement retirement income.
We have partnered with Fluent, who are Equity Release specialists. They have a dedicated team of leading experts who can provide equity release advice and guide you on everything from:
- How to take out an Equity Release Loan
- Market value guidance on your property
- Early repayment charges
- Lifetime Mortgage if you have existing mortgage
- How to make equity release work for your situation.
If you’d like to speak to the experts, give our friendly UK based team a call on – 0800 470 3752
What is a Lifetime Mortgage?
A lifetime mortgage is a type of equity release that involves borrowing money against the value of your home. The mortgage like most, is secured against your home. The mortgage loan is typically repaid when you pass away or move into long-term care, and interest accrues over time. There are many different types of lifetime mortgages available, so it is important to speak with an adviser to determine which is right for you.
As above, we have partnered with Fluent, who are Lifetime Mortgage specialists, they offer a dedicated team of leading experts that can advise on everything from:
- How to take out a Lifetime Mortgage
- Market value guidance on your property / How much you could release
- Early repayment options for the amount you owe
- Lifetime Mortgage if you have an existing mortgage
- How you pay back the loan / Pay off the interest
Do I need an adviser?
Yes, it is highly recommended that you seek financial advice from an equity release adviser when considering releasing equity from your home. An equity release adviser can help you understand the different types of equity release products available, the costs and risks associated with each, and whether they are suitable for your personal circumstances.
At SavingSuperStore, we have partnered with Fluent, who are a specialist equity release provider, that have a dedicated team of leading experts that can advise on equity release and assist you in obtaining the right mortgage for you.
What are the types of Equity Release?
There are two main types of equity release: lifetime mortgages and home reversions. A lifetime mortgage involves borrowing against the value of your home, while a home reversion plan involves selling a percentage of your home to a third party. Both options have their pros and cons, and it is important to seek advice from an adviser to determine which is right for you.
What is a home reversion?
A home reversion plan is another form of equity release that involves selling all or part of your home in exchange for a lump sum payment or regular income.
Home Reversion gives you the the right to continue living in your home as a tenant. As with a lifetime mortgage the debt is only repaid if you move (for example, into a care home) or after your death. As with lifetime / equity based products you must be at least 55 years old.
Get Equity Release Advice
Our partner are experts in Equity Release and all of their advisers are members of the Equity Release Council.
If you’d like advice and want to obtain a quote you can also call the UK based team on – 0800 470 3752.
Once you are happy with the product you have been offered it is often a good idea to speak with your financial adviser for peace of mind. As with all mortgage products, getting a lifetime mortgage or equity release loan is a big commitment, so you should take the time to understand all the pro’s and cons.
What is the Equity Release Council?
The Equity Release Council is a trade body that represents providers of equity release products. It sets standards for the industry and ensures that all members adhere to a strict code of conduct. One benefit of the equity release council is their ability to offer independent legal advice.
By choosing an equity release product from a member of the Equity Release Council, you can be assured that the product meets high standards and comes with certain guarantees.
Members of the Equity Release Council attach a no negative equity guarantee to the plans they offer. This means that if the value of your property were to fall below the level of the debt, the lender itself takes the hit, and you will never owe, or pursued for the shortfall.
Is Equity Release a good idea?
Of course, unlocking a tax-free lump sum from your home with equity release sounds great, and it is, but like any financial decision, you do need to do weight up the pros and cons of equity release and do some homework!
To determine whether equity release is suitable for you, you should commit some time to personal research to ensure Equity Release is the right option for your circumstance.
Releasing Equity
Hopefully you are now more informed on what Equity Release could unlock for you.
Want to find out if the equity release scheme can help you or your family? Ready to take out equity release and get advice? Speak to one of the expert advisers today who can help you formulate an equity release plan and find you the best deal, suited to your circumstances.
You can also call the UK based team on – 0800 470 3752
