Equity release allows you to turn the value in your home into a lump sum or a regular income, without having to downsize or move house. Because you need to have paid off most if not all of your mortgage, equity release is usually considered by people in later life looking for a bit of extra income.
Equity release works by lending you money against the value of your home. There are two main forms of equity release:
A lifetime mortgage allows you to draw a lump sum or regular amounts against the value of your home. You have to pay interest on the amount you have borrowed. When you die or move out, the house can be sold and the proceeds used to pay off the mortgage.
Home reversion involves selling part or all of your home to a company who then pay you either a lump sum or a regular income. You can stay in your home until you choose to sell, or until you die or move into care. At that point, the company receives their share of the proceeds from the sale.
If you receive an income from equity release, this may reduce your entitlement to certain means-tested benefits. You still have responsibility for maintaining your home in good repair. Equity release is not suitable for those who want to pass on the full value of their home to their family. To fully understand the features and risks of Equity Release, you should ask for a personalised illustration.
Your Mortgage Expert can provide advice on Lifetime Mortgages. Call our mortgage advisers on 0141 471 4545 or fill out the form below.
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