Releasing equity from your home

What is Equity Release?

This is a way of turning some of the value of your home into cash, either as a lump sum, regular income or both.

The following factors will normally come into any scheme falling under the definition of equity release for older homeowners:

•   A minimum age - usually 60 but it can be as low as 55.
•   You continue to live in your home for as long as you want.
•   You receive a guarenteed tax-free cash sum, income for life or both.
•   Providing the provider is a SHIP member, you have the freedom to move to a suitable   property, and without financial penalties, should you wish to do so in the future.
•   There are no repayments required until your home is sold. This is normally on death or   entering long term care.
•   As long as the scheme has a 'no negetive equity' guarentee, your estate will not be liable for   any debt beyond the property value, regardless of future house prices.
  

The two most common ways to release cash and remain in your home are:

Lifetime Mortgage

With a lifetime mortgage you release equity from your property your property for part of its capital value but, unlike normal mortgages, no repayments of capital are required; instead the interest is added to the initial loan amount and repaid when the property is ultimately sold. Lifetime mortgages have become the most popular type of equity release plan in recent years and it is also possible to arrange a drawdown facility allowing you to only release funds when required. This then means that interest is only charged on each drawdown.

Home Reversion Plan

With a home reversion scheme you sell all or part of your home to a company and continue to live in it as a tenant rather than the full owner. On your death the plan provider recieves the full value of the part of the property you have sold. Schemes can offer a lump sum, a ‘drawdown’ facility, a regular income or a combination of these options.

Equity release schemes aren’t suitable for everyone and you should consider the alternatives first. It is important to seek professional advice before proceeding.

Complete an online enquiry form or call us on 01457 859 139 to discuss your requirements.