If you are over 55 years old and a homeowner the house price increases over the last decade mean that your most valuable asset is most likely to be your home. So if you need extra cash for a new car or home improvements or would like to make yourself more financially comfortable in retirement, it may be worth thinking about releasing equity from your home.
Halifax equity release plans are not currently available, but there are numerous other lenders offering equity release schemes. The competitive range of equity release products currently on the market mean there may be the perfect plan out there for you.
The key advantages of equity release are:
- You can access some of the money your home is worth without downsizing or moving.
- Any funds you raise through equity release are tax free and can be used for anything you want.
- No need to make monthly interest rate payments.
- Option to be paid by lump sum or receiving it in increments.
What is Equity release?
Equity release refers to a diverse range of products that will allow you to access some of the money your home is worth by securing a loan against the property’s value. There are two key types of equity release products on the market.
Lifetime mortgages are the most popular kind of equity release programmes. With a lifetime mortgage you can take out a loan for a percentage of the value of your home and do not usually have to make any monthly interest repayments on this loan. Instead you make an agreement with the lender that this amount will be repaid to them along with any interested that has accumulated on the property by the sale of your home when you move or die. Until this point the property remains yours.
There are a few variations on lifetime mortgages some allow you to pay a monthly interest rate in order to ensure a larger inheritance for your loved ones you then only pay back the original amount you borrowed through the eventual sale of your home. Other types do not base the repayment on interest but instead you agree with the lender the amount that will eventually be repaid through the sale of your home during the application process.
Home reversion is an alternative way to release equity from your home. In this instance you would sell your property to a home reversion company or an individual for less than the market value, However the reversion company guarantees your right to continue living in the property until you die or move into care, at which point they can sell the property.
Some home reversion plans may require you to make monthly rental payments but these are in most cases at reduced rates compared to what the actual rental value of your home is. You are also required to keep your home in good condition.
Is Equity Release right for me?
Equity release is not right for everyone and it will affect what you can pass on to your beneficiaries. When deciding if equity release is suitable for you and your family it is important to consider all of your options due to the range of different products on the market, which all have different advantages and stipulations. To find out more about the different types of equity release and if any of them is right for you, simply click on the link and fill in the quick form and an equity release specialist will get back to you with free, no obligation quotes and advice.