Equity Release

Equity release refers to a range of financial products designed to let you access the equity tied up in your home, converting the value of your assets (your home in this case) for cash. If you’re over 55 and own a property, you can release the equity of your home for a lump sum pay-out or multiple installments.

There are two main types of equity release – known as Lifetime Mortgages and Home Reversion – which have different pros and cons:

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Lifetime Mortgages

Allow you to take out a mortgage on your property – as long as it’s your main home – whilst keeping ownership. You can ring-fence some of your property’s value and make repayments on your mortgage or allow the interest to add up, as the loan and any interest will be paid off after you die or move into long-term care
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Home Reversion

A Home Reversion is when you sell all or part of your home to a home reversion provider in exchange for a lump sum or regular payments. You keep the right to live in your property rent free, indefinitely, but you must maintain and insure the property.

As with lifetime mortgages, you can ring-fence a part of your property’s value, and the percentage you retain will stay the same unless you take further cash releases. At the end of your home reversion plan, the property will be sold with the proceeds being divided according to the ratio of ownership.

If you’re considering Equity Release and would like to know more about Lifetime Mortgages and Home Reversions or want help in finding the right policy for your needs, contact us today.