Equity Release Mortgage
Equity Release Mortgage
With an Equity Release mortgage you can release equity from your property to use the cash as you wish. According to research by Norwich Union who are the UK's largest provider of equity release schemes, 22% of the over 55's are concerned about not having adequate income in retirement. This is particularly true of women in retirement who tend to live longer and often have lower retirement provision. With house prices having increased significantly over the last 10 years many people are unlocking equity in their homes to improve their retirement income.
An equity release mortgage or lifetime mortgage as it is often called is a loan secured on your home to free up capital which then can be used to generate income or for any other purpose. Interest payments on the loan are rolled up on top of the capital for the life of the loan, and no repayments of capital are made while the owner lives in the property. The loan is repaid from the proceeds of the house sale when the owner dies or when the owner moves out.
Equity Release Mortgage Rates are usually higher than ordinary mortgage rates and there are often high redemption charges in the early years. In addition there are often set up charges and fees associated with a property valuation and the use of a solicitor.
If you are considering an equity release mortgage it is important to get advice or to find out more, you may want to read through our Guide to Mortgage Equity Release.
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Lifetime mortgages as from October 2004 are regulated by the Financial Services Authority. A lifetime mortgage is a loan secured on your home. The loan and interest are normally repaid from the proceeds of the sale of your home when you die or move into long term care. With a home reversion plan you sell all or part of your home for cash. However you do not get the full market return for doing so. The above equity release mortgage detail is for information purposes only as does not constitute financial advice under the Financial Services and Markets Act 2000. THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
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