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Equity release – live the life you want
When you’re heading towards or starting your retirement, you may find yourself wanting a little extra money for any number of reasons: people are living longer, you may have unexpected demands on your finances from family, or your pension(s) may not be living up to expectations.
This can feel as though you have no freedom to achieve any further life goals. It’s often forgotten that a large proportion of your wealth is locked up in your property.
What is equity release?
Individuals aged 55 and over can release some of the wealth tied up in their property without having to sell it.
If you, as a homeowner, decide to use equity release, you can draw a lump sum or regular smaller sums from the value of your home whilst still residing there. There are plans through which you can take as little as £10,000 tax free and leave further funds in reserve for when you need them.
The two equity release product types available are the lifetime mortgage and the home reversion plan, both of which are regulated by the Financial Conduct Authority (FCA). In the modern equity release market, there are various different features that go with these products. With providers coming up with new features all the time, there’s bound to be an equity release plan to suit your particular requirements.
Am I eligible?
If you’re a homeowner aged 55 or over with a property worth at least £70,000, then you may qualify for equity release.
Where do you start?
You’ll have a lot of questions when approaching equity release planning, and you’ll need to think it through carefully, with all your options laid out in front of you, but where do you start?
It’s important to have an experienced and independent adviser to help you throughout the process. We’ll make certain that we give you the best advice from the current market, as well as from our own knowledge and experience, and in a clear and completely understandable way. We come to you, operating throughout the UK as well as from our offices in Burton on Trent, Lichfield and Ashby de la Zouch.
Equity release calculator No Personal Details
Use our calculator to see how much equity you could release from your home, No personal details required.
If you decide to take out a lifetime mortgage, you must take the following points into consideration:
It can reduce the amount of inheritance you’ll leave behind to your friends and family.
It may affect your tax position and the welfare benefits you’re entitled to.
Interest will be added to the amount you’ve borrowed plus any interest already added, which is known as compound interest.
If you decide to repay the loan early, there may be an early repayment charge.
The amount shown is only an indication and isn’t guaranteed. To calculate this amount, we compare your age and property value to our “loan to value” table. This allows us to work out what percentage of your home’s value is available to you.
For a personalised illustration, please contact us directly.
Please contact me. I’d like to find out more about…
Popular reasons for releasing equity
Going on holiday
Home and garden improvements
Gifts to help friends and family
Paying off existing debts
Repaying outstanding mortgages
Increasing retirement income
Help with regular bills
Choosing the right plan for you
It’s important to have the advice of a knowledgeable adviser at this stage, as choosing the right type of equity release plan depends on the following:
- The market value of your home and the equity available
- Your age
- Your health
- What your retirement goals are
- Inheritance-protection options: view PDF
- Fixed or variable early repayment charges
- Downsizing protection: view PDF
- Whether you’d like to make interest payments or not: view video
- What other options are available to you
Lifetime mortgage
This type of mortgage is secured on your property whilst you still own it. You can make monthly or partial repayments, or you can opt not to make any repayments; for both partial and no repayments, the loan amount plus any interest is repaid when the last applicant passes away or moves into long-term care. Usually, this is achieved through the sale of the property.
View PDF | View video
A home reversion plan
This means that part or all of your home is sold to the reversion provider in return for a lump sum, and you have the right to live in your property until the last applicant passes away or moves into long-term care. At that point, your property is sold, the reversion provider receives their share of the sales proceeds, and the leftover proceeds become part of your estate.
View PDF | View video
8 steps to responsible equity release
1.
Getting expert advice
After your initial enquiry, we’ll arrange for one of our advisers to visit you at your home. We’ll take some time to get to know you and find out what your goals are.
Then we’ll explain the product features of each of the different types of equity release and review your situation to assess the best option for you.
2.
Research and planning
The next step is for us to research the whole market to find the plans that best match up to what you’ve told us. Once we’ve identified the most suitable plan, we’ll arrange for your adviser to come back to see you to talk you through the details in full.
3.
Thinking things over
Once we’ve discussed the plan, we always advise that you speak with your family, so that everyone understands the arrangement. It’s a good idea to write down any questions that come up during these discussions. There will be no pressure from us to go any further or make any decisions at this stage; take your time and prepare as many questions as you can before our next meeting.
4.
Taking care of the paperwork
At our next meeting, we’ll go over the details again to make sure that you fully understand the arrangement, and we’ll answer all the questions you’ve gathered since we last met. If you’re happy to go ahead, we’ll then start arranging the relevant paperwork.
5.
Working with lenders
Once we’ve submitted your application to your chosen provider, they’ll arrange for a Royal Institute of Chartered Surveyors (RICS) property survey to confirm how much your property is worth and, in turn, the amount of equity you’re able to release and whether the provider is comfortable with lending against your property.
6.
Making a personal offer
Once the property valuation survey has been completed, the provider will issue your personal offer to you. This will include all the terms and conditions and the full details of your plan. We’ll arrange to meet again and go through your personal offer together. If there are any questions at this stage, we’ll address them, so that you fully understand and are happy with your plan.
7.
Appointing solicitors
Once you’re comfortable with your personal offer, the next stage is to appoint a solicitor to take care of the legal work. You may want the legal work to be carried out by your own solicitor or we can arrange for an independent solicitor to visit you at home at your convenience. When everything’s ready to be signed, a meeting will be arranged, which your Equity Select adviser will be happy to attend, for reassurance, should you wish.
8.
Releasing the equity
When everything has been completed by the solicitor, you’ll receive the money into your chosen bank account to spend how you wish. This usually takes between four and eight weeks.
