There are two types of Equity release product, lifetime mortgages and home reversion plans. Lifetime mortgages are where the funds are released to you now, or in stages, and the mortgage payments are accrued by the lender and taken from the cash received for the property when it is sold, usually after your death. You continue to live in your home as long as you wish and you can use the released funds in any way you please. After your death, any surplus money realised from the sale of your home would be added to your estate. With lifetime mortgages, you must ensure that "no negative quity" safeguards apply to the mortgage.
What do we mean by Equity Release
Basic considerations for Equity Release
Equity Release Schemes
Equity Release
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To be considered for equity release, you need to be aged 55 before anyone will consider offering you an equity release scheme. At this age, the percentage of the value of your equity in the property that you can receive will be quite small. This is because the lender must ensure, that on average, there will be sufficient value in your property to repay the loan when you die. The older you are when you apply for equity release, the higher will be the percentage of the equity you can receive. You must remember that you will still be responsible for the general maintenance of the property, as you were before.
There are many variations on the theme and many providers to consider but basically they fall into two main areas. Those that pay a lump sum to be repaid with interest at the time the property is sold and those that provide a lump sum but then rent the property back to you at agreed rates. There are good and bad examples of equity release schemes on offer and this means that you must study any offer you are made very carefully to ensure it is right for your circumstances. Its also wise to involve those who may inherit your estate, as their final inheritance may be affected.
Click on the button to view some frequently asked equity release questions
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None of the information on this website is intended to promote any specific mortgage product or provide mortgage advice.
CharltonOnLine.com is a trading name of Charlton Marketing and Development Ltd.
CharltonOnLine.com is a trading name of Charlton Marketing and Development Ltd.
Your home may be re-possessed if you do not keep up repayments on your mortgage.
This is about lifetime mortgages and home reversion plans. To understand the features and risks, ask for a personalised illustration.
With home reversion plans, you agree to sell all or part of your property to a reversion company, either for a lump sum or for a monthly income. The price you will receive will reflect less than the market value, as the reversion company is likely to have to wait a long time to get it's money.
If you are considering a home reversion plan, you should only consider taking out such a plan with a company who is registered with SHIP. This will give you greater protection as SHIP rules specifically state that customers have the right to remain in the property for life.
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