A good way of adding to or boosting your retirement income is releasing equity from your home to provide you with a capital sum to spend on yourself.
If you need a cash boost then raising a lump sum from your property could be the answer. It is not for everyone but it serves to aid your retirement.
What you need to know
- Age. For a lifetime mortgage you (or both of you, if you’re borrowing jointly) need to be at least 55 years old.
- For a home reversion plan you (or both of you, if you’re taking out a plan jointly) need to be at least 65 years old.
- You must own property in the UK, which must be your main residence.
- House Value. Minimum £70,000
- Property needs to suit criteria. Your property must be in reasonable condition and over a certain value, and there may also be restrictions on the type of property accepted.
- If you have a mortgage or secured loan on your property you may still qualify for equity release, but it will depend on the value of your home and the amount outstanding on the existing mortgage or loan. You'll have to pay off any outstanding mortgages or loans secured against your home at the same time as taking equity release.
- Equity release may not be suitable if you have dependants living with you. Any dependants should take separate legal advice. If they wish to remain living with you in the property, they may need to sign a waiver confirming that they understand they don’t have the right to reside there if you die or move into permanent residential care.
Speak to someone today
If you would like to speak to someone directly today,
please give Howard a call.
Available Monday - Friday 9am to 6pm
Obtain your Permission
Releasing Equity is a process that requires guidance because you are taking a cash value from the equity in your home so it is a big decision to make.
As a result of your enquiry we will telephone you to assess what you are looking to achieve.
Agreement / Paperwork
Upon your agreement we will discuss your case with the best suited company concerned, give you initial feedback regarding the figures concerned and with your agreement submit the enquiry to the company concerned.
The company that we have recommended to you will then deal directly with you start to finish and initially telephone you to confirm what we have discussed and then go through their process and timeframe with you. We will oversee all and ensure a smooth process start to finish. There are no hidden fees or charges, it is all very clear and transparent. We do not charge you a fee. We will get paid from the selected company concerned upon completion of your equity release.
Once your business need is completed and set up then unless you require any of our other services we carry out 6 monthly reviews to keep in touch but you know where we are.
Be advised that we do not cold call, we do not mail shot, we do not pester people, we do not force people to make decisions they do not want to. Everyone who we see is as a result on an enquiry led by them, meaning that the potential client has made the decision to look at what they want and in most cases already made up their minds what they require. This is the purpose of this website to enable you to find us so we can assist and advise you accordingly.
Advantages of Equity Release
- You can get a tax-free lump sum and/or smaller, regular payments to supplement your income, and can continue to live in your home until you die or move into permanent residential care.
- You may continue to benefit from any rise in the value of your property which could offset the compound interest roll up being applied via the lifetime mortgage.
- You can opt to pay some or all of the interest if you wish.
- You can agree an initial borrowing level and take less giving you the facility to draw more in the future without any lengthy application or additional costs involved. So flexibility can be built in.
- You can still move to a suitable alternative property in the future, as equity release is transferable. It will be subject to your new home meeting the property suitability criteria applicable at the time.
- With a lifetime mortgage, you continue to live in and keep ownership of your home.
- Your assets are assessed when receiving long term care or in a care home. If you have spent some of your equity before you get there then it reduces your value which would have been otherwise going to long term care asessment.
Disadvantages of Equity Release
- Equity release reduces the value of your estate and the amount that will go to the people named as beneficiaries in your will. Your estate is everything you own, including money, property, possessions and investments.
- With a home reversion plan, the reversion company owns all or a part-share of your home. These plans are less popular.
- Getting a lump sum or taking extra cash to supplement your income may reduce your entitlement to means-tested benefits, now or in the future.
- If you get care at home funded fully or partially by the local council, they may start charging you or ask you to pay more.
Some reasons you should use us
- Access to our initial advice and finding a suited lender for your requirements
- Only the best brokers and product providers used to handle your application
- We get paid from the brokers and providers that are used in the process following completion
- No hidden extra costs, all fees and charges fully disclosed at the outset
- Flexibility of product and tailored to your needs
- Extensive Industry Experience
- We are totally Independent, Directly Authorised Advisers.
- We are friendly and talk plain English and no waffle.
- No pressure selling from us.
Some examples why you may consider an Equity Release
- You have a current interest only mortgage and no means of paying it off and wish to repay this debt via an equity release which will repay the current mortgage rather than face the prospect and expense of having to sell and purchase a smaller property. (This will depend upon your age, property value, amount that you can borrow being equal or greater than the current mortgage on the property)
- You have a repayment mortgage which still has a time to run and you wish to repay this sooner rather than later. (This will depend upon your age, property value, amount that you can borrow being equal or greater than the current mortgage on the property)
- Your husband or wife had passed away suddenly and your income has reduced dramatically and you still have a mortgage or loan debt. Life is suddenly unaffordable. State benefits are not sufficient. The only way to settle the debt is sell the property, purchase a smaller property or apply for an equity release. (This will depend upon your age, property value, amount that you can borrow being equal or greater than the current mortgage on the property)
- Your partner is ill and needs some specialist help or equipment and or home modifications such as bathroom, stair lift, mobility. You have limited resources and wish to raise capital with this objective in mind.
- You have a small mortgage and lots of equity or you own your own home outright. You wish to raise capital to aid your retirement but you do not require all of the money at once. You can raise sufficient to repay the small mortgage and some extra cash or just cash if you have no mortgage to clear and have an upper limit which you are not drawing right away so it is not costing you anything. In the future you can draw against this pre agreed amount and receive the extra cash quickly without having to start all over again so very flexible for you income wise.
- You have a stable retirement income and no financial worries. You own your home outright. You want to raise some cash from your equity in order to help your children and grandchildren out in life.
- You have a small retirement income, you are just ticking over, bills are ever increasing and purse strings are getting tighter. You own your own home outright and you see this as an ideal opportunity to boost your finances and retain home ownership and security for the long term.
- You wish to raise some money to fund some home improvements and conventional lenders are too costly.
- You have income but other debts draining your resources and see this as an ideal opportunity to repay all of your debts which will reduce your outgoings and increase your quality of life. Depending upon the figures there could be extra left over for you.
- You wish to raise some money to purchase a second property to rent out and increase your retirement income.
- You wish to raise some money for luxury items or treats such as to buy a new car or have a holiday of a lifetime or many holidays and see this as an ideal way to achieve this.
- You own your own home. You have dependants who you would like to leave money to. Your income from pensions or investment is tight. Life is not getting any easier. Many people live in poverty states when they don't need to with the overwhelming desire that they have to leave some estate to their children at any cost yet the cost is to themselves. You decide to put yourself first for once and raise capital to increase the standard of living. Inheritance is a welcome benefit to those who inherit, not a necessity and comes at a cost of a life or lives.
- You have no dependants, no one to leave your estate to and see this as an ideal opportunity to raise some extra funds to live life to the full and increase your retirement income and resources.
- You have worked hard all of your life. You have a good retirement income. You have no specific financial worries or troubles. You are concerned that in the long term your assets could work against you meaning you will spend all you have earned and amassed throughout your working life obtaining care when someone with no funds can get it for free on the NHS. On this basis you decide to release some equity and enjoy a better lifestyle while you are healthy enough to enjoy it. (This scenario is known as the grey brigade).
- You are worried about your health in the longer term and decide to release some equity to purchase a long term care plan amongst other things to offset the cost of care and protect your estate going forward, plus some extra cash for yourself.
- You wish to raise some extra money against your property to help your children sooner rather than later and keep some for yourself.
- You wish to raise some money against your property have a sufficient income to offset the roll up of interest by paying a monthly sum to reduce this roll up and help safeguard the estate.
Equity Release explained
Equity Release is a financial agreement that allows you to access cash obtained from the value of your property each month. It can be released as a lump sum or drawn down in stages as needed. This is done via a lifetime mortgage. Modern equity release plans are extensively regulated. Both you and your partner are guaranteed to retain full home ownership for life and you will never owe more than your home value. This is known as the no-negative equity guarantee. The cash released is tax free and is only repayable upon both of your deaths or moving into long term care.
The cost of this is charged at a fixed rate and the compound interest is added to the amount you initially borrowed. With the no-negative equity guarantee cap this is collectively not going to amount to more than your home value. Therefore you would not pass on any debt in excess of the value of your home. The value of this mortgage debt will reduce the overall value of your estate.
As there are no monthly payments to be made and you are free to spend the cash raised in any way you see fit you can't face any repossession proceedings for missed payments like in a regular mortgage.
You can move home and transfer the lifetime mortgage to another property as long as it fits criteria and the property is suitable. You can also repay the full amount early and in some instances there could be early repayment charges. Some offer partial repayment with no charges.
Equity Release is regulated by the Financial Conduct Authority (FCA). An Adviser needs to hold the required qualification to advise you on Equity Release and the adviser firm has to have the required permissions. Like all mortgage based products you have the right to change your mind at any time up until completion.
If you do complete an equity release (lifetime mortgage) then it is the same as a regular mortgage, the mortgage loan is secured against the property that you are living in. The deeds of the property remain in your names with the mortgage as a first charge. Unlike a regular mortgage with a specific end date the Lifetime mortgage will end on death or you move out into long term care.
How does Equity Release affect benefits?
Equity release can affect any benefits you receive, and may have an impact on any benefits that you may become entitled to in the future.
If you receive any means-tested benefits, they may be reduced or lost entirely. Means-tested benefits include:
- Pension Credit
- Jobseeker’s Allowance
- Income Support
- income-related Employment and Support Allowance
- Universal Credit
- Council Tax Support
What are the risks?
- Equity Release is a mortgage based product and it is a loan secured against property.
- If you are not paying the interest the interest is added to the loan balance and compounded up so in time it will increase.
- Equity release in some cases can affect your benefits meaning that you have exceeded cash limits which could mean you are no longer entitled to some of your benefits.
- When you move out of the property into care or pass away then the loan has to be repaid, usually from the sale of the property.
- If you are not paying interest then the loan plus compounded interest over the years can mount up. If there is low or limited property value increase during this period the equity share on sale could be higher than at the outset.