Equity Release

EQUITY RELEASE THE 10 REASONS WHY

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DEBT CONSOLIDATION:-

home owners find themselves burdened with debt from credit cards, personal loans etc. Equity release can be arranged to release sums of £10,000 upwards.

MOVING HOUSE:-

Equity release can be used for house purchase for most property types including some sheltered accommodation.

ADDITIONAL PENSION INCOME:-

Equity release can be used to raise additional tax-free income for life or a drawdown option can provide regular income to meet specific needs.

REPAYING EXISTING MORTGAGE:-

Mortgages into retirement are not uncommon in the post retirement market. Equity release can offer a solution.
LUXURY PURCHASES:-

Use the equity in the property to fund special purchases, holidays, cars etc that would otherwise not be affordable.
PRIVATE MEDICAL COSTS:-

Funds can be raised from the equity in the property to finance private medical treatment.

HOME IMPROVEMENTS:-

Equity release is an ideal way to raise funds for either essential repairs or home improvements such as a conservatory.

FAMILY ASSISTANCE:-

Equity release gives the ability to raise funds to help the family now for house deposits, university fees or wedding costs etc.

INHERITANCE TAX PLANNING:-

Equity release can be used as a means of releasing capital for IHT planning purposes and can have a major impact on your IHT position..

CASH EMERGENCY FUND:-

Usually in addition to the above, set aside a conservative amount of cash for an emergency fund.

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EQUITY RELEASE KEY BENEFITS

  • The money can be used for any purpose eg: paying off an existing mortgage or loan, home improvements, assisting children/grandchildren onto the property ladder, Inheritance Tax planning, moving house, holidays, private medical costs, additional income etc.
  • There are no monthly repayments.
  • Choose to take your cash as one lump sum or in installments, depending on your circumstances and the product you choose.
  • Most providers offer a no negative equity guarantee. This means that you or your heirs won’t owe more than the value of your home.
  • The interest on each loan amount is normally fixed for the life of the plan when you release your money (based on the current interest rate at the time of borrowing).
  • You always own your home whilst you have a lifetime mortgage.
  • You’re able to borrow a percentage of the value of your property (dependent on age, the plan provider and the product option chosen).

you need more money in retirement, you could cash in on the wealth that’s locked in your home?

You have spent most of your adult life paying off a mortgage so you can be debt-free in retirement. So why would you want to borrow money all over again?

  • The answer is simple. What’s the point of owning your home if you can’t keep it maintained, go on holiday or treat the grandchildren now and then?
  • There will also be less for the taxman if your estate is big enough to fall into the
  • Inheritance Tax net.
  • have £801 billion tied up in property according to the Pensioner Property Index.
  • Equity release allows you to borrow money against the value of your home without making monthly repayments (although there is the option to do so, should you wish.)

 

Here are two options…

Use a Lifetime Mortgage

  • The most common way of getting cash from you home is to take a lump sum. The lender pays you the money and then charges interest on it.
  • key factor is that the interest is added to the loan instead of you paying it straightaway although the option to pay the interest does exist.

Two important points are :

  • (1)       The you have the absolute right to remain in your home until you die, go into residential care or decide to move.
  • (2)       It is  guaranteed that the outstanding loan will never be bigger than the value of their home.
  • a Lifetime Mortgage with “drawdown option”
  • A second approach to equity release is a so-called drawdown scheme. With these you are told how much you can borrow — but you only take money as it is required, for example, you may be able to borrow £75,000 but only use £25,000. This can be better because you will only be charged interest on the money you borrow, so the debt would grow more slowly
  • further information on the many ways that Equity Release can help you achieve the life you deserve.
    • Approximate Maximum percentages that can be released using Equity Release
  • Age 55 56 57 58 59 60 61 62 63
    % 20 21 22 23 24 25 26 27 28
    Age 64 65 66 67 68 69 70 71 72
    % 29 30 32 33 34 35 36 37 38
    Age 73 74 75 76 77 78 79 80 81
    % 39 40 41 42 43 44 45 46 46
    Age 82 83 84 85 86 87 88 89 90+
    % 46 46 46 46 46 46 46 46 46

    Minimum property values

    £70,000

  • Existing Mortgage
  • Must be paid off using the Equity Release
  • Minimum Initial Advance
  • £10,000

Equity release is a very specialised area very few mortgage brokers are qualified to advise on equity release, many companies that list equity release as one of their services most probably sub contract out the application therefore possibly the person you are talking to a is not fully qualified in equity release and will not be the person putting forward your application.

If you would like to explore equity release further we can put you in contact with “The Way Ahead” they are specialist brokers who only deal in equity release, we have been associated with them for a number of years, and have worked with then to set up Trust and Estate planning for their clients.

Contact us now for a no-obligation chat.

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