Modern mortgage needs are so wide reaching for today’s homeowners, that equity release is fast becoming a more commonplace method of funding a retirement income. Having evolved hugely from their early, more rigid days, there are now far more lenders in the market offering flexible equity release products.
According to The Royal London Mutual Insurance Society (Royal London), to release equity from your home, you must first have a property worth over £70,000, and be over the age of 55. When calculating how much equity you may have to release, you must first work out the value of your home against how much of your mortgage you still owe.
Deciding on the right equity release route for you
There are two typical ways to go about releasing equity from your house. One of these is via a lifetime mortgage, which is paid off upon your death or if you were to move into long-term care. The other is via a tax-free lump sum. While releasing equity without having to make monthly repayments is attractive to many, there are also repayment options available for those who would like to reduce the size of the loan, while they still own the property.
Sensibly does it
Your home may have increased in value, and there may be more equity within your property than you realise. Ultimately, the decision to release equity is all about the value you would like to remain in your home, when it’s inherited.
If you still have a mortgage to pay off, then this doesn't prevent you accessing a lifetime mortgage, but you would have to agree to pay off the existing mortgage with the equity released funds, should you go ahead. If you choose to, it can help to involve your family in your decisions around equity release, as it will affect the amount of inheritance you leave.
Contrary to popular belief, you are still free to move or downsize your property should you wish to. As long as your lifetime mortgage is accepted by your lender, you can transfer it to a new property at any time.
Safeguarding your financial future for you and your family
Working with a responsible equity release consultant will ensure that regardless of what happens to house prices, if you decide to take out an equity release mortgage, you will never owe more than the value of your home, when your mortgage ends. Extra safeguards such as this are essential in the equity release process, which is why it pays to do your research. Skyline Mortgage Consultants are members of the Equity Release Council, and accountable to their code of conduct for responsible lending. Lifetime mortgages that meet Equity Release Council standards have a No Negative Equity Guarantee that ensures borrowers will never owe more than their home is worth, and that they have the right to remain in it for life.
Want to explore your equity release options with our responsible equity release consultant?
To begin discussing your equity release options, book an online face-to-face appointment with Craig. We do not charge a penny for talking through your options and you are welcome to have your family members present during the call, so that they can ask any questions if they have them.
Our processing and administration fee is £995.00, payable should you ask us to arrange your mortgage, this is payable on completion for our service in relation to lifetime mortgage contracts.
This is a lifetime mortgage. To understand the features and risks, please ask for a personalised illustration. Check that this mortgage will meet your needs if you want to move or sell your home or you want your family to inherit it. If you are in any doubt, seek independent advice.