Equity Release Mortgage
An Equity Release Mortgage is a scheme aimed at homeowners over the age of 55 who wish to release equity from their home without the need to sell the property or move out. The schemes are designed to allow people to release money who would not otherwise be able to take on a regular mortgage. For Equity Release Mortgages you will need the assistance of a Specialist Mortgage Adviser with the Certificate in regulated equity release to guide you through the process. This is an area we can help.
Equity Release is a Financial Conduct Authority regulated mortgage product and those that work in the equity release sector are usually members of the Equity Release Council. The main role of the Equity Release Council is to ensure that financial products sold to the consumer are safe and accessible.
The main principle of equity release is to allow a home owner to release some of the capital in the property obtaining either a cash lump sum or to provide a steady income using the value of your home.
The most popular type of equity release mortgage is the lifetime mortgage. This is where the homeowner releases equity from the property whilst still retaining ownership. Unlike a traditional mortgage the homeowner does not usually make any monthly payments to the equity release provider. A charge is placed on the property and interest accrues until the loan is paid off – usually when the homeowner dies or the homeowner goes into long term care and the property is sold.
The home reversion plan is where the homeowner agrees to sell all or part of the home but the equity release provider allows the homeowner to stay in the property rent free until death or placed into long term residential care.
There are many equity release providers and they all have different criteria.
For Lifetime Mortgages, some equity release providers have different minimum age thresholds. Some allow you to take the money as you need it whilst others insist on providing a lump sum only. The amount you can borrow also differs between providers.
For Home Reversion Plans the the percentage of market value differs from lender to lender as does the amount of maintenance needed to keep the property in tip top condition.
Our specialist adviser will guide you on what is the best plan for you and which equity release provider offers the best terms suitable for your circumstances.
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