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Equity Release

As we retire or move closer to retirement, more and more people are facing the dilemma of being asset rich but cash poor. You may live in a property of substantial value, but unfortunately don’t have the income to enjoy the standard of living you would like. What do you do if you can’t, or don’t want to move home or sell a second property but would like to raise money for a one off improvement or to supplement your income? If you own your own home, equity release could be an option to consider.

Equity release is a complex area, and while it can help older homeowners use the value of their homes to generate the income they need, it’s imperative to fully understand all the potential benefits and risks, with a solicitor to represent you if you decide to proceed with a plan.

Types of equity release

There are mainly two types of equity release, being a lifetime mortgage or a home reversion scheme.

With a lifetime mortgage, probably the most popular method, you borrow an amount of money against the value of your property, with this usually not paid back until you pass away or move into long-term care.

Conversely, a home reversion scheme is where you raise money by selling your home, or a share of it. You retain the right to live there, usually until you die or move into care.

If you take out equity release with someone else, often a partner, the money does not normally have to be paid back, or your property sold, until the last remaining person dies or moves into care.

Mortgage companies that we often work with include:

• Aviva
• Just Retirement
• Pure Retirement
• Legal and General
• LV
• More2life

and many more, along with working closely with equity release advisors from companies such as Age Partnership, LaterLiving Now!, The Right Equity Release, etc. We would be happy to put you in touch with them, if required, who at no charge can assess your needs and circumstances, so that an informed decision can be made as to whether equity release is a suitable option for you.

Who can apply for equity release?

As might be expected, there are a number of conditions that you must satisfy before being able to take out an equity release plan. Ordinarily these include:

• you, and anyone you are borrowing with, are above a certain age, normally 55 for a lifetime mortgage and 60 for home reversion. The older you are the more you tend to be able to release.
• if you have an mortgage or secured loan already, you will need to pay this off on completion of the equity release, often using the money from the mortgage. Any balance after this can then be used however you so wish.
• you must own your property in the UK.
• your property must be of a certain value, depending upon how much you wish to borrow.

What could equity release be used for?

There are many reasons why you may chose equity release, such as:

• Home Improvements
• Increasing retirement income
• New car purchase
• Well deserved holiday
• Paying for private healthcare
• Helping children/grandchildren, for instance get onto the property ladder

Do I have to have a solicitor?

The Equity Release Council require that anyone obtaining equity release receives independent legal advice from a chosen solicitor. The mortgage company will have their own legal representation, fully separate to your own, to ensure that your interests are protected at all times.

Equity release can be a complicated process however the solicitors at Metcalfe David Eyres Sheffield or Chesterfield, working for a fixed fee, know every aspect of the process and will take you through all the procedures and paperwork, step by step, in a home appointment if you so wish, to ensure that your lifetime mortgage or home reversion scheme is finalised as quickly and stress free as possible.