fbpx
image backgroung

What is Equity Release?

Find out more about Equity Release

Equity Release is a very popular way for homeowners

over 55 years old across the UK to raise tax-free cash from their stored-up equity to provide funding to achieve their dreams in later life.

Anthony Doherty

The most common form of Equity Release are Lifetime mortgages. Unlike other forms of Equity Release, this type of plan offers much more security to the homeowner, such as total ownership of the property throughout the life of the mortgage, being able to downsize and move to another property and a guarantee that you cannot owe more than the value of the property at the end of the plan.

The amount of tax-free cash you can release depends upon two main factors. The age of the youngest applicant and the value of the property, which is established by having a professional valuation carried out which is typically free. Some lenders may take into account underlying health issues when calculating how much is available.

Many modern plans also allow a large degree of flexibility in that the homeowner or their family can actually pay, in most cases, up to 10% of the initial sum borrowed to reduce the loan over time and preserve the remaining equity and protect any future growth in property value. If clients would prefer not to service the loan, the lender simply adds interest to the sum borrowed monthly or annually at a rate typically fixed for life.

Only when the surviving borrower either passes-on or moves into long term care does the loan become repayable. The beneficiaries of the estate can either sell the property and repay the loan from any proceeds or retain the property and repay the loan from other sources. Payments are not mandatory and are simply down to the choice of the customer.

The other main form of Equity Release is called Home Reversion plans. These involve selling part or all of your property to a lender and remaining in the property until death or going into long term care. At Equity Release Scotland we believe our customers should at all times retain ownership of their properties and so we decline to advise on these plans.

What Equity Release Plans can I have?

Once you have decided to release tax-free cash from your home your Equity Release Scotland adviser will recommend a plan to suite your unique set of circumstances. This will be done in the comfort of your own home at a time which suits you. We also recommend you invite your family along so they can help you make an informed choice. We believe this is not something you should do over the telephone and so we strongly advise on a face to face meeting in your own home. The three main types of Lifetime Mortgages are:

A Lump Sum Mortgage:

This is a loan secured against your property allowing access to a pot of cash. Find out more about a Lump Sum Mortgage

A Drawdown Lifetime Mortgage:

This allows you to have a smaller initial sum initially with a built-in reserve facility whereupon you can request further sums in the future. With this option, you only pay for the sums actually drawn down and used. Find out more about a Drawdown Mortgage

An Income Lifetime Mortgage:

Instead of having a lump sum you can elect to have income paid on a regular basis. Find out more about a Lifetime Mortgage

We are here to help you

To Provide Friendly, Efficient Advice For The Life Of Your Mortgage.

Request Free Brochure

Looking to release some cash that is tied up in your property?
FREE BROCHURE

Contact Us

You can contact us by calling
0808 1000 170 or using our contact form
CONTACT US

How much can you release

Use our Equity Release Calculator to find out how much cash you can release
CALCULATE NOW