New Life Equity Release
If you are a homeowner aged over 55 who has been looking at ways to raise some extra funds you might have thinking about taking out an equity release plan from a provider like New Life.
The New Life equity release plans available are known as ‘lifetime mortgages’ these allow you to unlock the value in your property and use the cash as you wish without having to move out of your home.
A lifetime mortgage is a loan secured against your home for a percentage of its value. You continue to be the property owner but you agree with the lender that the loan will be repaid along with any interest through the sale of your home after you die or move into care.
There are different types of lifetime mortgages; Some known as ‘interest only’ give you the flexibility to pay off the interest on a monthly basis to keep the amount of debt to a minimum. Others known as ‘roll up’ do not require you to pay anything before the house is sold, however due to interest in this case being compounded the amount you will repay could be considerably more than the amount you borrowed. Some providers also offer fixed rate mortgages where you agree with the lender beforehand the exact sum that they will be paid through the eventual sale of the property.
If the amount of money owed becomes greater than the value of your home then your estate could be charged unless your plan carries a ‘no negative equity guarantee’ which all Equity Release Council Registered plans do. This guarantee means that you will never have to repay more than the amount your home sells for, even if this is less than you originally borrowed.
The other type of equity release you may wish to consider is a home reversion scheme. Home reversion works by the sale of your home (or a portion of it) to a reversion company for less than its actual market value, the reversion company will guarantee your right to continue living in the property as well as providing you with a lump sum payment or with regular ‘income’ payments. Once you die or move into care they will sell your home.
Some plans require you to make monthly rent payments at a discounted rate; others will let you continue living there for free.
What to consider
Equity release is not the right choice for everyone. It will also reduce how much you can leave behind to your beneficiaries. You may wish to consider other options such as downsizing or relocating to a more affordable area to access some of your home's worth.
Find out more
To find out more about New Life equity release and the other leading equity release products on the market, simply click on the link and complete the simple form, an equity release specialist will be in touch to offer you independent help, advice and quotes.