Equity Release
Many homes have soared in value since they were first purchased, and you may be able to unlock some of the cash, tax free, through equity release. If you’re 55 or over, and you’re a homeowner, get in touch to see how you could benefit.
Equity Release
Many homes have soared in value since they were first purchased, and you may be able to unlock some of the cash, tax free, through equity release. If you’re 55 or over, and you’re a homeowner, get in touch to see how you could benefit.
Unlock tax-free cash
A Lifetime Mortgage will reduce the value of your estate and may affect your entitlement to means-tested benefits and tax status.
The impact of not servicing monthly interest payments on a Lifetime Mortgage is that the outstanding debt can grow rapidly, thus reducing the value of your estate. For example, if the interest rate was 7% a year, a £50,000 loan would double to £100,000 after 10 years assuming no repayments are made.
This is an example for illustrative purposes only and personalised advice and recommendations should be sought from a qualified professional. You are strongly advised to register a lasting power of attorney. This will allow your affairs to be managed by somebody else if your mental abilities significantly decline.
What Is It?
Equity release refers to a range of products that allow a homeowner over the age of 55 to keep ownership of their home, whilst accessing some of its cash value. These products are called a lifetime mortgage, a form of loan with no monthly repayments (although you may choose to make repayments depending on how it would benefit you) and it is tax-free!
This type of later life mortgage is specifically designed for people who are ‘asset rich and cash poor’. Maybe your pension isn’t as much as you’d hoped for, but your property value has soared in recent years. Equity release enables you to access the cash that is currently tied up within your home.
How Does It Work?
You do not have to make monthly repayments, but some lifetime mortgage providers could give you the option (which may be beneficial depending on your circumstances). The maximum amount you can borrow is based on the value of your property and the ages of the homeowners (you must be 55 of over).
If you currently have a small mortgage, this would need to be paid off as part of the equity release transaction. The loan is then paid back with proceeds from the property’s sale upon the homeowner’s death or transition into long term care.
How Can We Help?
At Warners we have the specialist knowledge and qualifications to help you through the equity release process and will explain both the advantages and also the points to be aware of such as the reduction in your estate for your beneficiaries, and any effect on current or future means tested state benefits. We also take the time to fully understand your individual circumstances to make sure that this is the best course of action for you, if it isn’t, we will say so.
If you already have an equity release contract, it is essential that you review it regularly. We may be able to find an equity release plan that offers a reduced interest rate, increased flexibility, saves your estate substantial sums or that allows additional borrowing.
Can You Help Me With My Existing Later Life Mortgage?
If you have already got a later life mortgage, it is essential to regularly review it and see if a change in plans would offer a reduced interest rate, allow additional borrowing, or increase flexibility to save your estate substantial funds. Anyone with an existing later life mortgage could benefit from our consultation. We have found homeowners with later life mortgages from the early 2000’s often find the greatest benefits when reviewing their current plan.
What Does It Cost?
The standard fee is £799. This includes £299 on application and £500 at completion, which we may be able to claim from other sources. Regardless of if you decide to proceed with equity release, you also get a no-obligation consultation with a specialist Later Life Mortgage and Protection Advisor.
