Equity release market how perspectives are evolving Mortgage Introducer
For an uncomplicated, fixed fee of £750, regardless of the size of the loan, you get the full benefit of our expert advice. Many providers will charge you a percentage of the loan, so it’s difficult to predict how much it will end up costing you. A higher loan means a higher fee, even though the standard of the advice remains the same.
It can be tempting to sit on your hands and take a passive approach to investments in low-interest-rate environments. In what is equity release , however, you will find that there is lots of finance available at very attractive prices. Releasing equity even for a renovation or extension of your property may be worth considering, given the potential for an immediate uplift in capital value. For example, if you were to spend £100,000 on a renovation that resulted in a £200,000 uplift in the value of your property, this makes perfect investment sense. Rather than moving home, you can benefit from an instant return on capital invested.
You carry on living in your home, rent free, and when the property is sold, they reclaim their portion. This type of property equity release differs to a home revision plan as rather than selling the property, you would borrow against the value of the property. The oldest form of Equity Release is a Home Reversion Plan, offered to homeowners aged 60 and over, which involves exchanging a percentage of your property for a cash sum, or regular income. These are no longer popular due to their inflexibility, accounting for less than 1% of all Equity Release plans arranged, and generally don’t offer the best value for money. However, a good financial adviser would be able to advise on such plans, so any company that doesn’t do this is not a true Equity Release specialist and should be avoided.
Equity release may involve a lifetime mortgage or a home reversion plan, which is secured against your property. The advice that you will receive through the Radio Times equity release service will take into account plans from all equity release lenders so that the best plan for your individual circumstances can be found. If equity release isn’t the right solution for you, then Age Partnership have advisors and specialists who can discuss other later life lending options with you. With a Lifetime Mortgage, the loan and the rolled-up interest is repaid by your estate when you either die or move into long-term care. With some providers you can make a monthly repayment or an interest only payment.
There are two types of equity release; Lifetime Mortgages and Home Reversion plans. By using an Equity Release product, a home owner can draw a lump sum or regular smaller sums from the value of their home, while remaining in their home. You can also take an initial lump sum and draw other lump sums up to a set amount .
Different lenders have different rules covering the largest LTV they are willing to offer. This money may be released as a single lump sum, or you can have a ‘drawdown’ facility open to you, allowing you to dip into that money as and when you need it. Equity release is a form of borrowing designed for borrowers over the age of 55 who want to tap into some of the equity they hold in their property without having to sell up and downsize.