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Equity Release

View profile for Emma Morris
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What is Equity Release?

Equity Release is a way of unlocking some of the equity in your property whilst you still reside there provided you are over the age of 55.

What types of Equity Release are there?

There are two main types of Equity Release scheme; the Life Time Mortgage and the Home Reversion Plan.

The first type of Equity Release is known as a Life Time Mortgage. This is where you borrow against the value of your home, releasing a loan which can be used to provide an income, a lump sum or both. The loan does not have to be repaid until you pass away or move into alternative accommodation. Interest is usually at a fixed rate, compounded monthly, rolled up and added to the outstanding loan so that the debt increases as time goes by.

The second type of Equity Release scheme is known as the Home Reversion Plan. This involves all or part of your home being sold to a private company known as a Reversion Company; in return for which you receive a cash lump sum, an income or both. You can remain in your house, rent free or for an nominal rent, for the rest of their life. When the property is sold, usually after you have passed away or if you need to move into alternative accommodation, the Reversion Company receives the proceeds of the sale, depending on what share of the property has been sold to them.

Getting Advice

If you are thinking about an Equity Release plan, I would suggest that you contact an Independent Financial Advisor and talk to them about this in more detail. All Advisors dealing with Equity Release Schemes must have a specialist qualification. The Equity Release Council also provides some very useful guidance to anyone thinking about Equity Release.

Once you have decided to proceed with your Equity Release, you will then need to instruct your Solicitor. It is probably wise to instruct a Solicitor who is local to you as your Solicitor will need to meet with you face to face during the transaction. They will need to advise you on all of the documentation which you are entering into, obtaining your signature to the Mortgage Deed and providing a Solicitors Certificate to the Equity Release provider.

Here at Brethertons I specialise in Equity Release schemes and have represented many clients over the years in this area. Please do not hesitate to contact me personally on 01788 557563 if you wish to discuss your Equity Release further with me.

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