Useful information about Equity Release and the different types and options available to you including Home Reversion & Lifetime Mortgages in Gloucestershire & surrounding areas…
Home Reversion & Lifetime Mortgages Gloucestershire
What Is Equity Release?
In short, Equity Release enables home owners to access the equity that has built up in their house without the need to move or downsize. A loan is secured against you home and although there are different products available, the loan is ultimately paid off when the house is sold (usually when the homeowner dies or when they need to enter long term care).
Eligibility for Equity Release Products
Eligibility varies for each lender, however basic criteria requires the youngest home owner to be aged 55 or over (although some schemes may require a higher age). Your house should be worth at least £70,000, in good condition, situated in England, Scotland or Wales and be your main residence. Any existing mortgage or charges will need to be paid off with the funds gained from Equity Release.
Time to tell the truth…
It is fair to say there has been some negativity surrounding the old style Equity Release products called ‘Home Reversion’, well you will be glad to hear we don’t actively promote these to our clients. However, because of the negative press far too many people are missing out on lifetime mortgages which could help improve your retirement.
Equity Release as a ‘Lifetime Mortgage’ is regulated by the Financial Conduct Authority and is designed to help you access your equity whilst still enjoying and protecting your home.
With a ‘Lifetime Mortgage’ its great to know your lender doesn’t own your home, they are simply owed the money you borrowed plus some interest. You can either pay the interest off monthly or your lender will happily retrieve it, along with the original loan, once you pass away or move into long term care .
What is the difference between a Lifetime Mortgage and a Home Reversion?
Within the regulated market there are two main categories of products available: Lifetime Mortgages and Home Reversion Schemes:
A lifetime mortgage is for homeowners over 55’s and it’s designed not to be repaid until the house is sold. Usually, the interest ‘rolls up’ over the lifetime of the mortgage. Unlike a traditional mortgage, there are no monthly repayments, however you can choose to repay the interest each month. The tax free loan can be paid to you either as a lump sum or in smaller regular payments or a choice of both.
Home Reversion Plans allow you to sell all or part of your home to a Lender who will recoup any money lent when the house is sold. There are no interest payments/roll up. Your home remains yours and there is no day to day interference or restrictions on your house, except that you should keep the home in a good condition.
What is a Lifetime Mortgage?
A lifetime mortgage is the most popular form of Equity Release. It allows homeowners aged 55 and over to release tax-free cash tied up in their home. You can do it in two ways, either as a single lump sum or, following an initial release, in smaller amounts.
A lifetime mortgage is a loan secured against your home that’s typically repaid when you pass away or go into long-term care. With a lifetime mortgage you retain full ownership of your property and there are usually no monthly repayments to make.
- Available for homeowners aged 55 and over
- A lifetime mortgage lets you release tax-free cash tied up in your home
- You retain full ownership of your property
- It’s typically repaid when you pass away or move into long-term care
- You can’t take out a lifetime mortgage without taking advice first
Get in touch todasy to find out more…