EQUITY RELEASE

What is equity release?

Equity is the difference between the value of your home and the amount you owe on it, and Equity Release is a way of unlocking this value, and releasing the money to you.

You don’t have to move home, there is no tax to pay and you can spend the money on anything you want to.

Releasing equity in your property is simple, because the money that is obtained is yours in the first place.

  1. 1
    Popular reasons for releasing equity

    There are no restrictions relating to what the funds can be spent on. You can spend the money on yourself; your home; your family; in fact anything at all. Here are some other popular reasons to release equity:

    Paying off debt or clearing your mortgage; home improvements; a special holiday or car;
    helping your children; improving your lifestyle and general financial peace of mind.

  2. 2
    Who might qualify for equity release?
    Most Equity Release schemes require that the participants be over the age of 55, and any outstanding mortgage or secured loans must be paid off beforehand, or when the funds are released.
  3. 3
    What are the main types of equity release?

    There are 2 main types; they are Lifetime Mortgages and Reversion Mortgages.
    Both of these options involve no monthly payment by you but there are big differences between them.

    A Lifetime Mortgage involves you borrowing an agreed amount of money to be paid back with interest, usually when you die.

    A Reversion Mortgage involves you selling your home, or a percentage of it. When you die, the lender is then paid their share from the proceeds of the sale.

Equity Release FAQ

Below are some of the most common questions asked about equity release. They are not exhaustive, and the answers are only general. Please ask us if you think of anything else you need to know.

  1. Are there any restrictions on what I can do with the money I raise?

    No, you can use it for anything, but consider carefully how much you need to borrow. The more you borrow, the more interest will build up. This will increase the sum that has to be paid back to the lender when the property is sold.

  2. Will I be able to raise more cash from my home in the future?

    Possibly, depending on the type of loan you have and whether there is still enough equity in your home. You would need to speak to the lender or reversion company.

  3. Will I still own my home?

    Yes, if you take out a lifetime mortgage. But with a reversion scheme, the reversion company will own all or part of the property, although you can live in it for the rest of your life.

  4. What happens if the value of my home falls?

    Nothing. The lender or reversion company takes this risk, as long as you have kept to the terms and conditions of the mortgage.

  5. Could I ever owe more than the value of my house?

    No. All the lenders we recommend are members of the Equity Release Council and their plans will include a No Negative Equity Guarantee. This means you and your family will never have to worry about the implications of negative equity.

  6. Can I lose my home?

    Not under any normal circumstances, but you should ask the lender or reversion company if there are any exceptional circumstances in which this may happen. If you have a lifetime mortgage, the lender should say clearly in the Key Facts Illustration if there is any risk of losing your home.

    If you have a lifetime mortgage where interest is rolled up, you cannot lose your home due to arrears (missed payments) as you are not making repayments. This would also apply even if the amount you owe is more than the value of the property.

  7. What happens if my partner or I need long-term care?

    If one of you needs care in your home or leaves to go into a care home, your plan is not normally affected. However, the plan will normally end if both of you leave to go into a care home. You or your doctor may need to give medical information to the lender or reversion company in these circumstances.

  8. What will happen to my home in these circumstances?

    If both of you go into permanent care, the house will normally be sold. Any money left over after paying off the loan and interest would belong to you. If you have a reversion scheme, the reversion company will then own all or part of your property.

  9. What happens when I die?

    Your home will be sold once you and your partner have died. If you have a lifetime mortgage, the proceeds will be used to repay the outstanding amount and any money left goes to your estate. If you have a reversion scheme, the company will then own all or part of your property and they will be entitled to that percentage of the sale of the property.

  10. What happens if I die soon after taking out the loan?

    That depends on the terms and conditions of your loan. Some reversion schemes offer a partial refund if you die within the first few years of signing up to them, and many Lifetime Mortgage providers will waive any fee on death.

  11. Is there anyone else I can talk to?

    Apart from lenders and financial advisers, you can also get advice from your local home improvement agency, a Citizens’ Advice Bureau or a local housing advice centre. You can also speak to a solicitor and should think about discussing your plans with your family.

  12. What happens if I receive poor advice or choose a product that does not suit me? What rights do I have to compensation?

    This depends on the type of scheme, and who provided it. If it is regulated and you cannot sort out any complaint you have with your lender or adviser, you will have the right to go to the Financial Ombudsman Service.
    Additionally, the Equity Release Council has a voluntary complaints procedure for reversion providers.

Summary

Equity Release is becoming more and more popular. Life expectancy is increasing, and sometimes the savings we thought would be sufficient to last a lifetime, may not be enough.
Even considering the recent correction in house prices, most homes will be worth at least one hundred thousand pounds, and often much more. This means that releasing even a relatively small proportion of the equity held in a home can often make a big difference to someone’s future.

Equity Release is a highly regulated area, and you can be sure that the experience we have, and the advice you receive from us, will guide you towards the correct decision.

Please continue reading, and contact us if you would like our advice.

Financial Planning Products & Services

Here’s short descriptions of financial planning services offered complete with links to pages with greater content.

  1. Retirement Planning

    Retirement can seem a lifetime away especially when you’re young. It now seems more and more likely that we will have to rely on ourselves to provide the income we will need rather than the state, so it makes sense to start saving as soon possible.

    Our job is to make pensions simple for you. Simple to understand, and simple to appreciate.

    Building your pension savings

    Pensions are, of course, designed to enable you to save sufficient money to live comfortably after you have retired from work. We can show you how much your current plans will give you (if you have any), and then show you what you can do if it isn’t going to be enough. Simple!

    Read more…

  2. Retirement Income Options

    Start Planning Now!

    Within the last 5 years of your working life it is extremely important that you regularly review your pension arrangements.

    Firstly, have you enough money saved in your pension? You still have time to increase your payments or contribute single premiums to build up your fund and improve your pension, and of course benefit from the tax relief added to your plan.

    Secondly it is extremely important to make sure your money is invested with the degree of risk you are comfortable with. The nearer to retirement you are the more secure your investment strategy should be, as you don’t want the prospect of retirement spoilt by a sudden downturn in the stock markets.

    Find out more…

  3. Wealth Platform

    How can it help?

    The Wealth Management System allows your adviser to invest your money across all of the different asset classes using the top performing funds in all sectors of the market. You will benefit from being able to switch easily and cost effectively between funds and fund managers, all with limited and straightforward paperwork and administration, all at no additional cost.

    The service is designed to meet individual needs wherever you are in the financial planning cycle, whether your objectives are to create wealth, preserve wealth or to transfer wealth. Over 2200 investment funds are available with some of the most popular fund managers in the market.

    We have readymade and risk rated portfolios instantly accessible, enabling your adviser to invest your money with the degree of risk you are happy to take.

    Our flexible investment and pension contracts have no initial charges or exit penalties, and we can arrange your own client view giving you access to all your investment valuations in one place.

    Read more here…

  4. Savings & Investment

    Whether your intention is to save regularly for a specific purpose or to grow the money you have already accumulated, structured savings and investment advice will help you achieve your aims and goals.

    We don’t sell plans or policies, we provide you with good quality, independent investment advice to help your money grow. We will provide guidance on investment strategy, liquidity, portfolio construction, risk profiling and tax efficiency. Whilst all this may sound confusing, our experienced financial advisers will explain and guide you through all the various stages and options to tailor the right investment plan for you.

    Read more…

  5. Equity Release

    Popular Reasons for Releasing Equity

    There are no restrictions relating to what the funds can be spent on. You can spend the money on yourself; your home; your family; in fact anything at all. Here are some other popular reasons to release equity:

    Paying off debt or clearing your mortgage; home improvements; a special holiday or car;
    helping your children; improving your lifestyle and general financial peace of mind.

    Who might qualify for Equity Release?

    Most Equity Release schemes require that the participants be over the age of 55, and any outstanding mortgage or secured loans must be paid off beforehand, or when the funds are released.

    Find out more…

  6. Protection

    Unfortunately life is not as predictable as we might like. Bereavement, major illness, accidents and unemployment can easily threaten our financial security. Correctly planned, cost effective insurance cover can often mitigate these problems when they arise.

    More information here…

  7. Wills

    MAKING A WILL is the only way to ensure that your wishes are carried out after your death. If you have not made a valid Will, your property will pass according to the law of intestacy. This may not be what you would have wished for, but in any event, it is likely to take longer to finalise your affairs than if you had made a Will. During this time, your beneficiaries may not be able to draw any money from your estate. It can mean arguments and distress for relatives. Making a Will lets your loved ones know you cared enough to ‘sort things out’ in advance.

    More information here…

How Do We Work?

Our commitment is to provide our clients with personal face to face advice, and an ongoing first class service.

We believe that face to face personal discussions are extremely important in fully understanding your needs. As such out initial meeting is at our expense, and without obligation or time restraint. During our discussions we will encourage you to talk about yourselves, your concerns, aims and objectives, and at the end of the meeting we should have a clear idea of what is important to you, and how best we might help.

We want our clients to remain our clients, and we feel that the ongoing service we provide is second to none. Don’t take our word for it though, take a look at the Testimonials from our valued clients and see what they think.