Equity Release is Not for Everyone
Before deciding to go ahead with equity release, we will meet with you and discuss your financial situation as releasing the equity in your home is a decision that not only affects you, but the younger generations in your family as well as it will have an impact on inheritance – which can be both good and bad.
All the providers we work with have been approved by the equity release coucil and all the plans available have met their standards so you can be confident that anything we suggest to you is always going to be picked from the best products available on the market. Due to this being a major decision, financial advice is required as part of the set up process to ensure that this is the right path for you.
Advice
Our advisers will always provide impartial, quality advice with no pressure put on you. This allows you to make a decision in your own time, either in the comfort of your own home or over the telephone, whichever suits. We recommend that the subject of releasing equity be discussed with your family and we recommend that family members are invited to attend any meetings so that everything is in the open and evetyone knows what’s going on and what the impact will be in the future.
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It is important to consider all aspects of your financial planning to ensure you are maximising what you have already got. Equity release forms one part of your retirement plan and to ensure you are only borrowing what is required, we will look at the whole picture and if there are alternative options available we will make you aware of them.
Increasing numbers of homeowners who are retired, or approaching retirement, are looking to discover the facts about equity release; Is it safe? What obligations will I have? Can I guarantee some inheritance for my children? These are just some of the questions our advisers are regularly answer.
The reality is that there are a host of considerations to be made before deciding. To help you with this decision, below are some of the things to think about before you decide to go ahead with any equity release plan.
You are likely to have plenty of questions, hopefully we can answer some of the more common questions below, but if you want to know anyting further please don’t hesistate to get in touch with us
How Much Do You Want to Borrow?
How much you can borrow is determined by your age (you must be at least 55 years old), your property value and any health conditions that you may have
Drawdown, Income or Lump Sum?
Lifetime mortgages are the most popular type of equity release plan and can be taken out either as a single lump sum, a regular income or via ‘drawdown’
A lump sum may be right for you if you have a significant one-off expense, such as repaying an interest-only mortgage or major home improvements
If you need additional revenue to cover your monthly outgoings, then a fixed income lifetime mortgage could help
However, if you only need a small initial amount of money now and flexibility going forward then a drawdown contract may be more suitable for you so that you can take money from your “pot” as and when you need it.
Interest Rates
Lifetime mortgages work differently from traditional mortgages, and thus the interest rates do tend to be higher, although the majority do provide the security of a fixed rate for life. Interest is ‘rolled up’ (or compounded) and accrues over the lifetime of the loan. Many plans now allow you to make flexible, voluntary payments back to the lender if you wanted to reduce the final costs
The amount borrowed, and the interest are typically repaid when the plan ends which will be either on the policy holders death or selling the property upon entering long term care.
No Negative Equity Guarantees
As a member of the Equity Release Council we can give advice on plans that come with no negative equity guarantees. This means that when your plan ends and the loan is repaid, the final amount will never be more than the value of your property
Inheritance
Because equity release reduces the value of your estate, it could mean a reduced inheritance for your loved ones
Inheritance protection can ensure that even after taking a release of equity, you can guarantee there will still be some value available to pass on to your loved ones
