What costs are involved with equity release?
You will have to pay solicitor's fees; the costs of having your home valued by a surveyor and possibly also an admin fee charged by the equity release provider.
Who pays for repairs to the house?
With both lifetime mortgages and home reversion schemes, the responsibility for maintenance of the hose still lies with you. You will also still have to pay all your bills e.g. utilities, insurance and Council Tax.
Will my state benefits be affected if I take out an equity release scheme?
Yes, they could be. A scheme may reduce your entitlement, you should check on this before you take out any scheme, as it may leave you less well off than you first thought.
Will I be able to live in my own home until I die?
Yes, all schemes should guarantee that you, and your partner, will be able to continue living in your home for the rest of your lives. If however, you took the scheme out in only one name ad that person died, the property would have to be sold and the partner would have to move out. It is therefore advisable to take the scheme out jointly, and only take out a scheme where you are given a guarantee that you can live in your home for the rest of your lives.
Will I be able to move home in the future?
Some scheme offer the option of moving, some don’t. If you think you may want to move in the future, you should get advice and ensure you have chosen a scheme that allows it – many will allow a transfer of the equity release plan to a new property.
There may also be a penalty if you want to end the scheme before your death - for example if you sold up completely to move into a care home or rented sheltered housing – check the policy details.
How will I be affected if property prices change?
If you have a lifetime mortgage, the only affect of changing property prices will be the inheritance you leave behind. If prices go up, the value of your home will increase and will be worth more when it is sold after your death, so your family will gain.
If prices fall, your heirs will inherit less.
If you have a home reversion scheme and sell all of your house, only the company that bought it will be affected by property prices. F you sold part of your home, both you and the company will be affected.
Will my children or grandchildren be left with debts?
If house prices fall significantly, your children or grandchildren may not inherit anything, however, if the property is worth less than is was when the mortgage was taken out, they will not be liable for any shortfall.
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