Equity Release is the process of releasing equity (tax free cash) from your home whilst continuing to live in the property. These type of mortgages are designed for people who are aged 55 or over and who either own their own homes outright or have small mortgages. Equity Release is only a very small part of the overall mortgage market but is incredibly useful for customers you would describe as “asset rich and cash poor”. The two main types of Equity Release products are Lifetime Mortgages and Home Reversion. Neither income, credit rating or reason for the advance is important with Equity Release mortgages. The maximum loan amount available is instead determined by age, gender and property value. Both Lifetime Mortgages and Home Reversion products can be used to release additional regular income or a one off lump sum. A reserve amount can also be implemented which will allow further amounts to be taken in the future without the need for another application. Once an Equity Release scheme is in place the client continues to live in the property for life or until they chose to leave the home ie sell or go into long term care. The client will continue to be responsible for the majority of the day to day upkeep on the property although help could be available for large maintenance.
Professional advice from our Leicester mortgage brokers is recommended to explain the various Equity Release schemes and the differences between the two. This can be provided by an expert brokerage such as World of Mortgages and will enable you to select the most appropriate product for your needs.
You can of course raise money at any age by increasing your mortgage but World of Mortgages are able to offer plans that are exclusive to homeowners over the age of 55 which allow Equity Release without any need for you to make monthly payments.