Think about equity release with partner

Equity Release

Perhaps you have heard about Equity Release and would like to know more, or perhaps you are presently considering Equity Release and all the various options available to you.

Here at Equity Release Scotland, we have helped many families release some or all of the available equity in your homes. We not only understand the procedures but we also have gained an understanding for some of the more frequent questions and concerns that our clients have.

Our friendly and helpful customer service team are always available to answer any questions you might have. Whenever you use Equity Release Scotland as your broker, we like to go above and beyond your expectations. We are determined to find the best possible solution for our clients, and we achieve that by discussing your personal needs and preferences.

We treat every customer as an individual, and we work together to ensure that not only are you happy with the final product, but that you understand the various benefits. At Equity Release Scotland we are more than just a broker, we care about our clients and are determined to give every client the perfect product for them.

We understand that initially, some people may want to complete their own research, and so for those people, this page has been designed to answer the fundamental questions that the majority of people ask us.

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What is Equity Release?

There is a lot of confusion and misinformation in the news about what equity release actually is, so let us try and explain things properly.

Over the past thirty to forty years, many people took advantage of the right to buy scheme and purchased their home. This has proved to be a very shrewd investment, with property prices increasing drastically.

Many people now find themselves in the situation where they are living in a property that may be worth £200,000 but are struggling to meet their bills on a monthly basis. They can be collectively described as “asset rich and cash poor”.

The solution to this problem for an increasing number of homeowners is to use one of the many available Equity Release schemes. This allows the homeowner to take the maximum lump sum or alternatively, a more modest lump sum initially plus a cash reserve or draw-down facility for future use.

Whatever Equity Release Solution you choose, you and your partner can live in your home for the rest of your lives. The loan is repaid on death of the surviving partner or when the surviving partner moves into long term care with no prospect of returning to their home.

There are no restrictions on how you can spend the money; you can choose to repay other debts, enjoy some luxuries or just use the money to make everyday life a little bit easier.

For many people, equity release is the perfect solution to their financial stresses and allows them to enjoy their retirement that they have worked so hard for all of their lives.

One of the biggest misconceptions that people have is that by utilising equity release, they are somehow letting down their family by spending any inheritance. Again in our experience, the vast majority of families would be horrified to think that their parents were struggling financially, just to leave them an inheritance. Speak to your family and explain the situation, you might be surprised at their reaction, and never forget that the equity in your property is money that you worked hard for throughout your entire life.

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What is a Lifetime Mortgage?

Once you have decided to release some of the equity in your property, the next decision to make is which financial product you want to use for this purpose. A lifetime mortgage is the most common solution, and it works in a similar way to the standard mortgage you paid when you were buying your property but in reverse.

Own Property

To qualify for any form of equity release you need to be at least 55 years of age, and own the property. You can still be eligible for equity release even if you have an outstanding mortgage balance, but obviously, this will affect the total that you can borrow.

Valuation and Offer

The lender will have the property valued by an independent Chartered Surveyor. If the subject property is deemed acceptable to the lender the formal offer will follow based on the property value and the age of the youngest applicant. In some cases lenders will take into account the Health of the applicants.

Receive Your Cash

Once the Lifetime Mortgage has been agreed and the legal work completed the funds are deposited in the homeowners bank account. In many cases, the homeowner can repay the loan by paying up to 10% of the initial sum borrowed without penalty annually. If they decide not to exercise this option, the interest will simply roll-up annually and be repaid on death or after their entry into long-term care.

House Sale

Upon the death of the death or entry into long-term care of the surviving partner the property is then sold, and the proceeds from the sale are then used to repay the debt. Any surplus is transferred into the estate of the deceased to be shared among their designated beneficiaries.

Equity Release - Benefits

Among the main benefits of taking out a lifetime mortgage, are that it can releases some of the equity or value built up in your property over time, so allowing you to achieve your aims and objectives in later life. You are not obliged to make any payments to your Lifetime Mortgage, although many allow you the flexibility to do so. You will always own your home and are entitled to live there for the rest of your life.

Tax

Funds generated from your Lifetime Mortgage is tax free. What you eventually draw down may have an effect on any entitlement to benefits currently received. Equity Release Scotland will automatically check this for you as part of the advice process.

Advice

If and when you decide to move forward with your application, our team of advisors will assist you and answer any further questions you might have.

Assistance

Take you time and don’t ever be rushed into making a decision, whatever your requirements Equity Release Scotland will be there to assist you every step of the way.

Frequently Ask Questions

Once the money has been released to you, the choice on what to spend it on is entirely up to you. There are no restrictions whatsoever (provided it is legal!). So whether you want to go on a round the world trip, buy a new car, or simply pay off other debts, the choice is entirely yours.

Absolutely, that is one of the major benefits of this type of scheme, and it in our opinion is one of the more important foundations upon with the agreement is built. There is little point in removing the financial stress, if a few years down the road you are concerned about losing your home. In fact, not only are you entitled to remain in the home for the rest of your life, but so is anyone else mentioned in the agreement.

If everything goes according to plan, then it is entirely feasible for the money to be released to you between three and four weeks. However, always err on the side of caution and plan on the entire process taking up to eight weeks. The length of time is not entirely under our control, and can take even longer if your solicitor is unfamiliar with equity release schemes for instance.

When you sign the contract, you are simply agreeing to another style of mortgage, so the ownership of the property remains with you.

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To get more advice and information, please fill out the form and we will be call you back.