There are two types – a Lifetime Mortgage and Home Reversion plans.
It allows people aged 55+ to release money from the property they live in, without the worry of having to make monthly repayments. It can be used to withdraw money – either as a lump sum, or smaller, regular withdrawals – against the value of your home; allowing you to remain in your home AND raise money.
This can prove fundamental for some; reducing the financial worries sometimes faced by those in retirement.
If this is something you are considering, an equity release plan will need to be drawn up, but before that, there are several things to consider, aided with a list of pros and cons that are based on your personal circumstances... something our specialist team will be able to talk through with you, weighing up your options, any tax or benefit implications, along with the benefits.
While there is no real reason why equity release should affect your tax position, it could affect any benefits you are currently entitled to. For example, if any of the Equity Release loan is kept as cash savings, this may well take you over the threshold that entitles you to certain benefits.
Be sure to assess your personal circumstances and equity release needs fully. Discuss your requirements with an advisor and make sure you know all the facts, before making an informed decision.
Whatever your needs, there are various options available to you and, working together, we can help identify a plan that meets your needs.
What are the Options?
A Lifetime Mortgage does not require monthly repayments (although some plans will allow you to if you so wish). You will remain the owner of your home for the rest of your life – the same goes if you are a couple; the surviving person will be able continue living in your family home, either until their passing or should they move into a care facility on a permanent basis.
At such a time, when the house is sold, the interest accrued over mortgage term will be added to the loan amount, and the total repaid by your estate.
Home Reversion plan
A Home Reversion Plan gives you the opportunity to access part, or the full value, of your property, while still retaining the right to remain living in your property – rent free – for the rest of your life.
The plan provider will purchase all or part of your home, and based upon your age, health etc, will afford you either a lump sum – or again, regular payments – along with a lifetime lease. This lease guarantees you the right to continue living in your property, without having to pay any rent, for the rest of your life.
Both equity release options have variables that can be matched to your current and future needs, thus ensuring the plan in place for you.
The first step is to get some professional advice – please feel free to get in touch and speak with a member of our specialist team. Gather all the information you can, weigh up the pros and cons, consider the key features and any risks involved, and then discuss your options with your family. You should then be in the best possible position, to make an informed decision.
Call us 01945 773945.