Home owners may use Equity Release to finance a one off purchase or use the money to supplement their pension. This can also help people to give gifts to family members like providing their children with a deposit to purchase their first home. This can also be known as Lifetime Mortgage or Home Reversion.
What is an Equity Release?
Equity Release is a way to unlock money tied up in your home with a loan. The loan is repaid to the lender when the property is eventually sold. These types of loans are only available to home owners over the age of 55 and the amount you can borrow from your property will depend on your age.
What is a Lifetime Mortgage?
Most people who take out Equity release use a Lifetime Mortgage. Normally you are not required to make any repayments whilst you are alive, interest rolls up and is added to the loan. Some Lifetime Mortgages will give you the option to pay all or some of the interest but this varies from Lender to Lender.
What is a Home Reversion?
This allows you to sell some or all of your home to a Home Reversion provider. In return you will get a lump sum of money or regular payments. You can live in your home for as long as you wish, the property is sold when you die or move into long term residential care. The minimum age for some Home Reversion Plans can be 60 but some insist you are at least 65.
PCS Legal always recommend you seek appropriate independent financial advice before you decide to agree to an Equity Release. We recommend you speak to a financial adviser that is qualified in Equity Release so that they may talk you through all the options and make sure you understand so that you can make an informed decision. PCS Legal can recommend Financial Advisers should you need some assistance.