How to Release Equity
Looking to raise tax free cash without moving home?
Compare Equity Release Quotes From UK Providers
How to Release Equity
If you’re a home owner aged 55 or over who wants to raise some extra capital to make yourself feel more financial comfortable in your retirement years you might have been wondering to release equity from your home.
Types of Equity release
When it comes to releasing equity there are two types of plan so it is important to consider which would be the best option for you.
Lifetime mortgages allow you to get at some of your home’s value while maintaining your ownership of it. A lifetime mortgage works by securing a loan against your property for a percentage of its market value. The amount is then repaid through the sale of your home when you and your partner both die or move to a care home.
There are three types of lifetime mortgage:
- Roll-up – With this option both the original loan amount and the accumulated compound interest are paid off through the sale of your home.
- Interest-only – This plan lets you make interest repayments on a monthly basis but the original amount is repaid through the eventual sale of your home.
- Fixed repayment – Instead of repayment sum being calculated using interest you agree with the lender during your application how much more will be paid back to them when your home is sold. If your home decreases in value then you do not need to worry about any debt passing on to your estate as long as your plan has a ‘no negative equity guarantee’ this means you or your beneficiaries will never need to pay back any more than your home sells for even if it is less than the amount your borrowed.
Home Reversion Schemes
In a home reversion scheme you sell your property to a Home Reversion company at less than its market value for a lump sum or for a regular ‘income’ payment. In return the reversion company will guarantee to let you continue to live in your home until you and your partner both die or permanently move into care at which point they sell it. Some plans will let you live in the property for free others will charge a monthly rental amount a reduced rate.
Both types of equity release will involve some initial set up costs. Most companies will require arrangement and valuation fees however some will waive this initially and take it into consideration when calculating your interest rate or allow it to be deducted from your payment. You will need to pay your solicitor legal fees which may range from £300-£700. If you opt for a lifetime mortgage and then decide to pay it off before your contract ends you may incur an early repayment charge.
Find out more about equity release Equity release in a long term commitment that will reduce how much you can leave behind and it is not right for everyone. Therefore you should consider all of your options before making a decision.
We work with independent equity release specialist Key Advice who provide:
Equity Release Service
- Borrowing options from age 55 to 99
- Independent advice on your mortgage options
- Interest only options
- Top UK lenders compared
- One short form to complete
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE. Equity release may affect your entitlement to state benefits and will reduce the value of your estate. It may involve a lifetime mortgage or home reversion plan. All content set out in this website is provided for information only and should not be considered as advice. It is strongly recommended that you seek advice of a qualified, independent financial advisor before making any decisions to take out an equity release product.
Equity Release Links
- Equity Release Benefits
- Equity Release Drawbacks
- Over 60 Equity Release
- Equity Release Advice
- Equity Release Best Buys
- Equity Release For Over 55’s
- Equity Release For Pensioners
- Equity Release How it Works
- Equity Release in Birmingham
- Equity Release in Brighton
- Equity Release in Dorset
- Equity Release in Essex
- Equity Release in Glasgow
- Equity Release in Gloucester
- Equity Release In Kent
- Equity Release in Leeds
- Equity Release in Liverpool
- Equity Release In London
- Equity Release In Manchester
- Equity Release In Norfolk
- Equity Release in Northern Ireland
- Equity Release In Norwich
- Equity Release In Scotland
- Equity Release In Wales
- Equity Release in York
- Equity Release and Joint Ownership
- Equity Release Lifetime Mortgage
- Equity Release Loan
- Equity Release Mortgage
- Equity Release Pros and Cons
- Equity Release Providers
- Equity Release Rates
- Equity Release Rules
- Equity Release Schemes
- Equity Release Supermarket
- Equity Release and Taxation
- Equity Release to Buy Another Property
- Home Income Plan
- Home Reversion Scheme
- How Does Equity Release Work?
- How to Release Equity
- How to release equity from your house
- Is equity release a good idea?
- Releasing Equity
- Remortgage Equity Release
- Remortgaging to release equity
- What is equity release?