What is equity release and how can it help me?
Equity release is a way of releasing some of the money tied up in your property. The money can be used for a wide range of things. We know it’s something our clients have lots of questions about, so we’ve tried to cover some of the most common equity release questions and answer them for you.
What is equity release?
Equity release is a way to access the money tied up in the value of your home if you are a certain age. You can choose to receive the money you release as a lump sum or, as an initial lump sum with a ‘drawdown’ facility which simply means you can take several amounts out of this facility as and when required.
What is a lifetime mortgage?
A lifetime mortgage is another name for equity release. It is a loan that is repaid when you die or go into long term care. Your property is the security for the loan and the interest payments can be added to the loan. This does mean the amount repayable increases over time.
Who is eligible for equity release?
As with all mortgages, different lenders have different criteria about who they will lend to. You need to be at least 55. The amount you can borrow will vary depending on your age and the value of your property.
What are alternatives to equity release?
Retirement interest only mortgages are one possibility. The other is reviewing your budget and outgoings. We’ve worked with clients in the past, who haven’t needed to use equity release after we had reviewed all of their finances with them and found ways for them to save enough money to live on their existing income.
What can I use equity release for?
Pretty much anything! Although common uses include repaying an interest only mortgage, holidays, home improvements, and we’re seeing more and more older homeowners using it to help their children or grandchildren to get on the property ladder.
