What is equity release?
The equity in a property is the difference between its value and any mortgage or other debts held against it. Equity release is the term given to unlocking or making available some, or all of this value in your home whilst continuing to live in it. This can be done through either a lifetime mortgage or by selling a share of the property to a home reversion company. This is known as a home reversion plan.
Some people choose to keep the equity in their property throughout their lives whilst others might choose to use this money as they wish in their retirement. You can use equity release to give yourself a tax-free cash sum to spend as you wish, a regular income, or a facility enabling you to draw down money against the property, as and when required.
The amount of money that can be taken as an equity release is limited and determined by your age(s), the property value and sometimes your health. This will vary between lenders and the type of plan you choose.
You can continue to live in your home for the rest of your life. This also applies to your partner as long as the lifetime mortgage or home reversion plan is in joint names. When you die or if you move into a care home the property is then sold. You would then normally, in the case of a lifetime mortgage, pay the money back to the lender together with any interest accrued from the proceeds. In the case of a home reversion scheme the company would retain a share of the proceeds relating to the proportion of the property they purchased from you.
Equity release is not right for everyone and may affect your entitlement to state benefits and will reduce the value of your estate.
Are you eligible for Equity Release?
To be eligible for equity release, you need to be over 60, own your own home in the UK which needs to:
- be in a reasonable state of repair
- have adequate buildings insurance cove
- if leasehold, the property will need at least 75 years of the lease remaining (the loan can be used to extend a lease ).
The FirstStop Guide to Releasing Capital from Your Home
The importance of taking advice
There are numerous providers of equity release plans. Every lender can have differing interest rates, loan criteria and customer benefits each of which need to be thoroughly researched to match your personal needs.
For this reason FirstStop offers an equity release advice service provided by Just Retirement Solutions who is dedicated to providing customers with specialist equity release advice to help them enjoy retirement to the full. Just Retirement Solutions uses a panel of carefully selected products. An adviser will talk to you about your circumstances and assess whether equity release is the right option for you. If it isn't, they will clearly state the reasons why not. If it is, they will give you comprehensive advice on an appropriate equity release plan that meets your needs and circumstances. Advice is with no obligation and an administration fee of £749 will only be charged if you take out a plan.
The solution to releasing equity from the value of your home may involve a lifetime mortgage or home reversion plan. To understand the features and risks you should ask for a personalised illustration.
Introducing the Home Cash Plan
FirstStop is proud to introduce the Home Cash Plan is provided by Just Retirement Ltd. and designed with the help of the Joseph Rowntree Foundation.
The Home Cash Plan offers you flexibility and security. You can draw down smaller amounts of cash as and when you need it which means you only pay interest on the amounts you draw. It is a big decision to make and you need to be sure it is the right choice. It is therefore important to speak to an adviser who will explain the costs and risks involved whilst identifying if it is suitable for you.
Call 0800-232-1309. Lines are open Monday to Friday 9am to 6pm.
This is a Lifetime Mortgage and not designed for short term borrowing, so if you wish to repay early you may incur early repayment charges.
To understand the features and risks please ask for a personalised illustration.
If you are interested in the FirstStop Equity Release Advice Service or the Home Cash Plan please complete the enquiry form by clicking here or contact 0800-232-1309. Lines are open Monday to Friday 9.00am to 6.00pm. Or by email to; firststopadvice@justretirement.com.
Advice is provided by Just Retirement Solutions Limited and the Home Cash Plan is provided by Just Retirement Limited. Just Retirement Limited and Just Retirement Solutions Limited are authorised and regulated by the Financial Services Authority. Please note your calls may be monitored and recorded.