What is Equity Release?
Equity Release allows individuals aged 55 and over to release money from the property they live in without having to make any monthly repayments.
There are two types of Equity Release; Lifetime Mortgages and Home Reversion Plans. The Financial Conduct Authority regulates both.
By using an Equity Release product, a homeowner can draw a lump sum or regular smaller sums from the value of their home, while remaining in their home.
Equity Release can play a crucial role in retirement funding.
If you are thinking of taking out an Equity Release plan, then you need to find out as much as you can about your options and weigh up the advantages and disadvantages fully before you decide if Equity Release is right for you. You will need to understand the steps involved and which options are available to you. You will need to be fully informed about the effects this might have on state benefits and tax obligations.
When implemented correctly, Equity Release should have no impact on an individual’s tax position or their state benefits; however, each individual’s circumstances need to be assessed.
In the modern Equity Release market, there are a range of products to choose from, with new and innovative products created regularly.
What is a Lifetime Mortgage?
A Lifetime Mortgage involves taking a type of mortgage which does not require monthly repayments, although with some plans, rather than rolling up the interest, you can opt to make monthly repayments if you wish.
You do retain ownership of your home and interest on the loan is rolled-up (compounded). The loan and the rolled-up interest is repaid by your estate when you either die or move into long term care. If you are a couple, the repayment will be made when the last remaining person living in the home either dies or moves into care. This means that both you and your partner are free to live in your home for the rest of your lives.
Planning for the Future
Within these two categories, there are many different options available. Your current and future needs must be matched with the right type of Equity Release plan.
Whichever form of Equity Release you choose, you will require the services of an Independent Law Firm to deal with the conveyancing.
Butterworths have a team dedicated to the provision of Equity Release conveyancing.
To find out more, please use the form below to contact us. Alternatively, you can call us on 01228 812738.
Please note that Butterworths Solicitors do not give advice relating to Equity Release products but do recommend taking the advice of a regulated, Independent Financial Adviser.