Equity Release Today is your number 1 guide to all the latest equity release news on the internet. From interest rates, changes in the equity release market to explaining exactly what equity release can do for you, we have it all to help you make an informed decision.
Equity Release is an increasingly popular method of releasing tax free cash from equity tied up in your home. When you retire you may find that you don't have the money to do the things you wanted to in your retirement whilst you are sitting on a great deal of equity. Equity Release allows you to take some of that equity from your home and spend it on a holiday, paying off credit card debt or treating your grandchildren!
There are several types of Equity Release
Fixed Repayment Lifetime Mortgages
The amount you have to repay is set from the beginning of the plan.
The amount will be calculated taking into accounts several criteria such as age, your personal health and the value of your property.
When you or your partner, if you have a partner, have died or want to sell your property, the provider will then take the agreed amount from the proceeds of the sale of your property.
Roll up life time mortgages
A roll-up lifetime mortgage lets you borrow money with the loan secured against your home.
You get a set sum secured against the value of your property
Every year interest payments will be added to the loan.
The sum repayable to the provider is the initial loan amount plus any interest accrued, when the property is eventually sold.
The interest rates are normally fixed and will not change throughout your lifetime.
A home reversion scheme would entail you exchanging part or all of the value of your home/property to the your provider in exchange for a tax-free cash lump sum.
However the money received would not be a representation of the full market value of your property. This, however, enables you to carry on living in your home with no rent for the duration of your life. The provider will only receive a return on their investment after your death, or if you decide to leave your house and for example move into residential care.
If when taking out the equity release plan you decided to sell just a portion of your property to your provider, then after your death the home would be sold and the part you kept would be passed to your estate and the other portion would go to the plan provider.