Equity Release refers to a range of products that let you access the equity (cash) tied up in your home if you are over the age of 55.
You can take the money you release as a lump sum or, in several smaller amounts or as a combination of both.
There are two types of Equity Release:
With a Lifetime Mortgage you take out a mortgage secured on your property provided it is your main residence, while retaining ownership.
You can choose to ring-fence some of the value of your property as an inheritance for your family. You can choose to make repayments or let the interest roll-up.
The loan amount and any accrued interest is paid back when you die or when you move into long-term care.
With Home Reversion you sell part or all of your home to a home reversion provider in return for a lump sum or regular payments. You have the right to continue living in the property until you die, rent free, but you have to agree to maintain and insure it.
You can ring-fence a percentage of your property for later use, possibly for inheritance. The percentage you retain will always remain the same regardless of the change in property values, unless you decide to take further cash releases. At the end of the plan your property is sold and the sale proceeds are shared according to the remaining proportions of ownership.
If you are unsure about which product is right for you, you should seek advice from a qualified Equity Release adviser and ask for a personalised illustration.
Your home is at risk if you fail to keep up payments on your mortgage or any other loans secured against it. Buy to Let mortgages and Commercial Lending are not usually regulated by the Financial Conduct Authority. Equity release may involve a lifetime mortgage which is secured against your property or a home reversion plan which requires the sale of property for a discounted price. To understand the features and risks, ask for a personalised illustration. You only continue to own your own home with a lifetime mortgage.
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