If you own your own home and are 55 or over, equity release could provide you with a lump sum or additional income. It’s an increasingly popular tax-free way for people to finance or partly fund their retirement.
WHAT IS EQUITY RELEASE?
Put simply, equity release is a way of accessing some of the cash you have tied up in your home tax-free.
Equity refers to the market value of your home, less any outstanding mortgage and debts secured against it.
Equity release refers to a way of accessing some of the funds you have tied up in your home for those over the age of 55.
Example: If you bought your house in 1990 for the average house price of £58250* That same house could now be worth £233027* if you have no outstanding mortgage or loans secured against your home, you would now have £233027 equity in your home.
(* UK Land Registry House Price Index)
Using those same figures, if you had a mortgage outstanding of £20000, you would have £213027 equity in your home.
If you are a home-owner aged over 55, you may be able to release some of the cash you have tied up in your home to give you the financial freedom you are looking for. Whether you need a one-off lump sum or a regular income supplement to top-up your pension or savings, equity release may be the solution. For later life lending, it’s Equity Release by ME. Get in touch with one of our advisers today to find out more.
EQUITY RELEASE ISN’T THE ONLY OPTION FOR LATER LIFE LENDING.
Lending options include:
Lifetime mortgage: You retain ownership of your home and take out a mortgage secured on your property. Our advisers will help you understand all of your options, having understood your personal circumstances, and your immediate needs. There are various lifetime mortgages available, depending on your needs. You are under no obligation to make any capital and interest repayments as the capital and interest will be accrued onto the loan. However, some lenders will allow you to cover the interest monthly if you chose to. Any outstanding loan amounts, along with accrued interest, is paid back when you pass away, or should you move into long-term care, it will be repaid then. The type of lifetime mortgage you choose depends on your own needs and circumstances.
Retirement Interest Only Mortgage (RIO) This is similar to a lifetime mortgage, but eligibility doesn’t just look at the property value. It also looks at your income and assesses affordability. There may be the potential to borrow more with an RIO mortgage if you can comfortably afford the interest repayments. The advisers here at ME can help you to understand this option in relation to your own circumstances fully.
Interest-only mortgage: This is another borrowing option whereby you will only pay the interest on the borrowed amount, with the full loan amount being repaid at the end of the mortgage term. For most lenders, the maximum age for these mortgages is 70, but some do go up to 95. Lenders will generally require a minimum equity amount along with a repayment vehicle (savings, investments, other assets you have). Like RIOs, these are also assessed on income and affordability.
2. You will remain the legal owner of your home until you pass away or move into full-time care.
3. No negative equity guarantee
4. Flexible withdrawal and repayment options
5. You can choose to withdraw a one-off lump-sum or a cash reserve to withdraw down from regularly. You can choose to make no repayments or to make repayments on the interest-only. There is also an option to make partial repayments (T & C apply)
6. Tax-free cash for retirement
7. Possible Inheritance Tax Benefits *seek independent financial advice
Things To Consider
1. Releasing equity will reduce the value you have in your home, and subsequently, the amount of inheritance you are able to leave.
2. Equity release may alter your financial circumstances, changing any entitlement to state benefits and grants.
The friendly team of advisers here at ME have a wealth of experience when it comes to equity release. We provide tailored advice dependent on your circumstances and current needs. Whether you need some general information and a steer in the right direction, or specific advice and an outline of all available options, the team is ready to help.
THINK IT OVER
We’re only happy when you’re happy. You won’t find a salesperson here at ME; you will only find professional, friendly advisers. The most important thing for us is that you choose the right option for you and your family. Having sought advice, you have all the time you need to reflect and consider your options. You’ll never be pressured to commit to anything you’re not 100% sure of.
Once you have made your decision, our advisers will guide you through the application process, start-to-finish. Our support doesn’t stop there; in fact, our support doesn’t stop anywhere. We understand circumstances change and are happy to help with any eventuality, both present and future.
* You voluntarily choose to provide personal details to us via this website. Personal information will be treated as confidential by us and held in accordance with the Data Protection Act 2018. You agree that such personal information may be used to provide you with details of services and products in writing, by email or by telephone.