Equity release is a financial solution designed for homeowners aged 55 and over, allowing you to access the cash tied up in your property without the need to sell. The two most common types of equity release are Lifetime Mortgages and Home Reversion Plans. With equity release, you can enjoy a tax-free cash boost to help cover living expenses, home improvements, or any other needs you might have in retirement.
A typical equity release plan includes:
- Lifetime Mortgage: A loan secured against your home, which only needs to be repaid when you pass away or move into long-term care.
- Home Reversion Plan: Sell a percentage of your home while retaining the right to live in it rent-free for the rest of your life.
- Flexible Payment Options: Choose to receive the money as a lump sum, regular income, or a combination of both, depending on your needs.
- No Negative Equity Guarantee: Ensures you will never owe more than the value of your home when it is sold.
Benefits of Equity Release
- Access to Tax-Free Cash: Equity release gives you access to a tax-free lump sum or regular income, so you can enjoy your retirement without financial worry. You can use the money for home improvements, travel, debt repayment, or supporting loved ones.
- Stay in Your Home: With equity release, you retain the right to live in your home for the rest of your life or until you move into long-term care. There’s no need to sell or move to release the value from your property.
- No Monthly Repayments: Typically, there are no monthly repayments to worry about. The loan is repaid when your home is sold after you pass away or move into permanent care, offering you flexibility and reassurance.
- Flexibile to Your Needs: Whether you prefer a -time lump sum, regular payments, or the flexibility to draw funds as needed, there’s a plan to suit your lifestyle and requirements.
- Protect Your Inheritance: Many equity release plans allow you to safeguard a portion of your property’s value, ensuring you can still leave a financial legacy to your loved ones.
- Safe and Regulated: Equity release products are regulated by the Financial Conduct Authority (FCA), meaning they are a safe and reliable way to unlock the value in your home.
How to Get Started with Equity Release
Here’s how the process typically works:
- Initial Consultation: Start by speaking with an equity release specialist who will help assess your needs, property value, and financial goals. This discussion will guide you in determining which type of equity release plan might be best for you.
- Get Personalised Quotes: Clear Living will match you with top equity release providers, ensuring you find a plan that meets your requirements and offers excellent value.
- Choose Your Plan: Review your options and select the equity release plan that suits your needs. Consider factors like the amount of money you want to release, the type of plan, and any additional features such as inheritance protection.
- Property Valuation and Legal Advice: Your chosen provider will organise a professional valuation of your property. It’s also crucial to seek independent legal advice to ensure you fully understand the plan’s terms and conditions.
- Access Your Funds: Once everything is in place, the funds will be released according to your selected plan, allowing you to use the money for your chosen purposes. You can start using the money for whatever purpose you’ve decided.
