Equity release explained

What is equity release?

An Equity Release mortgage, also known as a lifetime mortgage, allows homeowners aged 55 and over to release money from their property, providing a lump sum. With Equity Release , you retain ownership of your home but the mortgage lender will have a first charge – similar to conventional mortgages.

In recent years, the Equity Release market has undergone big changes to improve products and to protect consumers. We have been members of the Equity Release Council for over 4 years and we pride ourselves on only offering you approved Equity Release Council Lenders.

An Equity Release mortgage isn’t affordability assessed, nor do you have to make monthly repayments, although some plans do allow you to pay the interest rather than letting it build up. The lender will require the loan to be paid upon your death or moving into long-term care. They will also require repayment if you sell your property and, if you move home sometimes you can port the mortgage to the new property. If you are joint owners of the property, you are not required to repay until the last remaining person in the home dies or goes into long-term care .

What can it be used for?

You can take a lump sum or have a drawdown facility to fund any of your needs.

There are many reasons that our clients use Equity Release including:

• home improvements
• gifting money to children
• holidays
• cars
• improving your day to day lifestyle
• repaying debts
• topping up income
• redeeming an existing mortgage

You can also use Equity Release to purchase a property – this could be a way of obtaining a higher-value property.

How can i set it up?

We offer face-to-face or telephone meetings, you are welcome to have family members or friends present at the meeting. It may be arranged over several meetings – often the first meeting is for us to get to know you and your objectives.

How much does it cost to set up?

We charge a fixed fee of £995 payable upon completion. This covers our advice, application, and liaising between the lender and solicitor where required.

Other fees to factor in are lender application fees and sometimes a valuation fee is also payable.

You will also need a solicitor – we work with solicitors approved by The Equity Release Council. We can pass on details for you if you do not have your own and can provide a quote at the outset.

If I take out an Equity Release scheme could I lose my house?

No, you have a right to stay in your home until death or if you go into long-term care. Any rolled-up interest can never go above the value of your home – this is due to the safeguard ‘No Negative Equity Guarantee’ upheld by the Equity Release council. You will benefit from rises in property value for the duration of your ownership.