Equity Release Back
When planning for retirement, it’s important that you take into consideration all of your assets. For some of us, after working a lifetime to pay for our retirement, we can discover that our pensions, savings and investments are not sufficient for us to enjoy our retirement the way we thought we would. It is at this point it becomes important to make use of all the assets we can. For most of us, our biggest asset remains our home, which is why Equity Release may be the solution for you.
Equity Release Schemes also known as Lifetime mortgages, allow people over the age of 55 to release a lump sum from their property, whilst continuing to live in their property for as long as they wish.
Types of Equity Release
Roll Up - Interest is charged on the amount you wish to raise, but instead of you paying the interest back to the provider each month, the interest is rolled up onto the loan.
Interest Only - So long as your income allows, you can decide to pay back the interest on the loan or part of the loan each month, to keep the amount you owe to the lender to a minimum.
- You are a Homeowner and it is your main residence
- You are 55 or over
- Your home is worth at least £70,000
- You wish to raise more than £10,000
- Your home is either Freehold or Leasehold with a lease of over 75 years
- You wish to stay in your home
- You have no mortgage already on the property, or if you do, you wish for the Equity Release to repay the current mortgage in full
Things to Consider?
The total loan (regardless of which scheme you wish to proceed with) is repaid when the last survivor either has to move into residential care, or passes away. You may even move home with the Equity Release however this is subject to approval from the provider.
Once the last survivor either moves into residential care or has passed away, generally the provider allows 12 months for the property to be sold and the loan repaid. If the property is sold for more than is outstanding on the loan, the balance is repaid to either yourself or your estate.
If the amount outstanding on the loan is more than the property is worth, as long as you proceed with a lender that is registered with the Equity Release Council (formally known as SHIP) neither you nor your estate will ever have to pay back more than the property is sold for.
You can opt for a Guarantee whereby subject to circumstances, you can protect a proportion of your property to leave to your Beneficiaries upon death.
If you are considering taking out a Lifetime mortgage, we recommend that you seek Independent Financial Advice.
Why choose Pavey Group?
Pavey Group have been offering Independent Financial Advice for over 25 Years. We provide trusted advice to all our clients on planning for their retirement and meeting their retirement goals. Our Equity Release Specialists based in our Torquay, Devon office have a wealth of knowledge and experience to help guide you through the process.
There are many reasons why someone releases capital from their home, some of the most common reasons include; topping up their retirement income, holiday’s, the purchase of a new car, providing their family with a lump sum to allow them to purchase their own property. Whatever the reason is Pavey Group is here to help.
Equity Release Schemes can be very helpful but are not suitable for everyone. It is important to understand the risks and to understand the cost, the level of flexibility and the possible impact on future State Benefits.
To arrange a complimentary consultation, please contact our Independent Financial Advisers on 0800 038 9733.