More commonly known as “Equity Release”
Equity release can provide you with the option to release a tax-free lump sum from your home by using the equity from your property. It is one way of adding to your retirement finances.
Equity Release is one way for homeowners who are aged 55 and over to release money from their house to provide you with a tax-free lump sum or a regular income. You won't need to make any monthly repayments and can use the money to boost your retirement income.
You can spend the money on whatever you like. Equity Release could be the solution to help with bills, paying off debts, make home improvements, helping grandchildren onto the property ladder, a new car or holidays.
The market is fully regulated by the Financial Conduct Authority and it's flexible. Your financial adviser can advise you if Equity Release schemes are appropriate for your circumstances and if they are,on a plan which matches your needs.
To qualify for Equity Release you must be aged 55 or over and own (& live in) the property you wish to release equity on.
There are two main types of equity release plans:
How does Equity Release work?
Step 1: Get advice
You will need to talk to an equity release adviser who is experienced in equity release and can help you to look at alternative means of raising funds. Your adviser will assess your personal situation and research the whole market in order to find the best plan for you.
Step 2: Personalised illustration
Based on your individual circumstances, your adviser will prepare a recommendation for you. They will also provide you with a personalised illustration which will detail how equity release could work for you.
Step 3: Independent legal advice
You will need to find a solicitor who specialises in equity release, we can recommend a good solicitor if you need one. They sort out all the legal details and make sure you fully understand how the plan works together with all the implications before you go ahead.
Step 4: Application, valuation & offer
Once you and your equity release adviser have decided on the right plan, your home will then be valued and you will be sent an offer confirming the details of your equity release plan.
Step 5: Completion
If you still decide to go ahead and you're happy with all the details of your equity release plan the you can submit your application. You should receive your money approximately eight to 12 weeks after your application has been received by your equity release provider.
Equity release may involve a lifetime mortgage or a home reversion plan. To understand the features and risks, ask for a personalised illustration.
Equity release may not be right for everyone. It may affect your entitlement to state benefits and will reduce the value of your estate.
Check that this mortgage will meet your needs if you want to move or sell your home or want your family to inherit it. If you are in any doubt seek specialist advice.