After years of paying your monthly mortgage payments, your home is likely to be your biggest asset, particularly if you’ve benefited from an increase in house prices over the last few decades.
The value of your home (less any mortgages or other loans secured against it) is known as equity. This equity is often passed on to your dependents/family/cat* as an inheritance.
An increasing number of people however are tapping into some of this value to help boost their retirement finances or help their children get onto the property ladder.
If you’re wondering if equity release is right for you, you’re in the right place. This article will take you through some of the basics of equity release before speaking to an expert equity release adviser.
What is equity release?
Equity release is a way for homeowners aged 55 or over to release tax -free funds from their homes without having to move. With a lifetime mortgage (the most popular type of equity release), there are generally no monthly repayments to make as the loan, plus any interest that accrues, is repaid when the plan comes to an end. Usually, that’s when you, or the last remaining applicant, either passes away or moves into long-term care. Importantly, with a lifetime mortgage, you’ll still retain full ownership of your home.
The money can be released to you as either a single lump sum or as an initial release amount, then further releases can be taken as and when needed, known as a drawdown lifetime mortgage.
With a lifetime mortgage, you have the right to remain in your home for as long as you choose to, or until you move into full time residential care or pass away. You also have the freedom to move to another property and transfer your loan without an early repayment charge (subject to the new property being acceptable to your lender at the time).
You will never owe more than the value of your home with the no negative equity guarantee. This means that even if you live to be 120 and the balance on the mortgage is higher than the value of the house, the lender will simply write-off any shortfall - giving huge peace of mind to you, and to those you leave behind.
The money can be used for a variety of purposes, and is often used for: • Repaying an existing interest-only mortgage at the end of its term • Gifting to family or providing them with an ‘early inheritance’ • Home improvements • Taking the holiday of a lifetime
Are you eligible?
Hundreds of thousands of people are already enjoying the benefits of cash they’ve unlocked from their homes. However, equity release may not be suitable for everyone, which is why it’s important to get expert advice before you make a decision. You may be eligible for a lifetime mortgage if: • You are aged 55 and over • You are a UK resident • You are a homeowner with a property worth at least £70,000
As a fully qualified and regulated Equity Release adviser, Stephen will discuss your requirements with you, and your family if you would like them to be present, to help you make the right decision.
In these strange COVID times, it has become common for meetings to be either over the phone or using Zoom type video-calls.
If you would like to arrange a no-obligation chat for yourself or a family member, please don't hesitate to get in touch by clicking the button below.
*Cat's can't legally inherit a property - they couldn't sign the paperwork.
A lifetime mortgage is a loan secured against your home. Equity release will reduce the value of your estate and may affect your entitlement to means-tested benefits. Alexander Financial Solutions Ltd offer lifetime mortgage products from a carefully selected panel of providers.
Unless you decide to go ahead, our service is completely free of charge, as our usual advice fee of 1.5% of the amount released would only be payable on completion of a plan, subject to a minimum advice fee of £995.
You should always think carefully before securing a loan against your property.