Equity release is a financial product that allows individuals aged 55 and over to unlock the value of their property without having to sell it or move out. It is essentially a way for homeowners to access the wealth tied up in their home, providing them with a lump sum of cash or a regular income in retirement.
There are several different types of equity release products available, each with their own benefits and considerations. The two main types are lifetime mortgages and home reversion plans.
A lifetime mortgage is a loan secured against your home, with interest accruing over time. The loan, along with the interest accrued, is repaid when the property is sold, typically when the homeowner passes away or moves into long-term care. Homeowners can choose to receive the loan as a lump sum or in regular instalments, and they retain ownership of their home.
On the other hand, a home reversion plan involves selling all or part of your property to a reversion company in exchange for a lump sum of cash or regular income. In this scenario, the homeowner no longer owns their home, but they are allowed to continue living in the property rent-free until they either pass away or move into long-term care. When the property is eventually sold, the reversion company receives their share of the proceeds.
Equity release can be a useful financial tool for those looking to supplement their retirement income, pay for home improvements, help family members financially, or fund long-term care costs. However, it is important to carefully consider the implications and seek independent financial advice before proceeding with any equity release product.
There are also risks associated with equity release, such as potentially reducing the inheritance you leave to your loved ones, impacting your entitlement to means-tested benefits, and accruing interest over time with a lifetime mortgage. It is crucial to fully understand these risks and weigh them against the potential benefits before making a decision.
In conclusion, equity release can provide homeowners with a way to access the value of their property in later life, but it is not a decision to be taken lightly. It is important to seek advice from a qualified financial advisor before proceeding with any equity release product to ensure it is the right choice for your individual circumstances.
Mike Jones
Later Life Lending Specialist
Mike Jones is a later life lending specialist who is responsible for the “Mewstone Later Life Lending” service. Mike has years of experience in retail banking as well as extensive knowledge of the later life lending sector.
Choosing to release money from your home is a big decision and it’s important for you to understand all the options available to you. This means that he will always offer you unbiased advice. It doesn’t matter to us which solution or lender is recommend, as long as it is the right one for you.
Mike Jones
Later Life Lending Specialist
Mike Jones is a later life lending specialist who is responsible for the “Mewstone Later Life Lending” service. Mike has years of experience in retail banking as well as extensive knowledge of the later life lending sector.
Choosing to release money from your home is a big decision and it’s important for you to understand all the options available to you. This means that he will always offer you unbiased advice. It doesn’t matter to us which solution or lender is recommend, as long as it is the right one for you.