Learn About Equity Release Mortgages
Your ‘equity’ is the market value of your home minus the total of outstanding mortgage payments on it. Equity release is a process that allows you to release this cash from your home. If you go ahead with an equity release mortgage then you receive a tax-free cash lump sum or extra income, which you can spend in any way that you choose (home improvements, vacations, paying off debts, help family, etc.). You get to stay in your home for the remainder of your life, or until you move into long term care.
The most popular type of equity release plan is a lifetime mortgage. This is when you take out a loan against a certain percentage of your property (up to 50%), which you normally receive as a lump sum. Instead of a lump sum, you can opt to have the money paid to you on a monthly basis if you prefer. You do not have to pay back any money at all whilst you are alive. The lender gets their money back only after your death, at which point the house must be sold.
How much cash you can release depends on how old you are, how much your home is worth, and if there are any outstanding loans on the property. To get a general idea of how much cash you may be able to release from your home, then you can use an online equity release calculator. They are free to use and are pretty accurate.
If you are seriously interested in equity release, then you should get independent advice, as although equity release can provide you with financial freedom, it is not always the right decision for everyone. You should be able to get a free initial no-obligation consultation with a personal independent adviser, who will assess your individual circumstances and tell you whether an equity release plan is the best option for you.
These advisors are not sales people – they are there to help you. They will answer your questions and will provide you with a report of their recommendations that you can take away with you. All facts, figures and costs will be made clear, so you will always know exactly what you are getting and when you will get it. They have a legal duty not to conceal anything from you, so you do not have to worry about being ripped off or scammed.
You do not need to give your equity release advisor an immediate decision. If you do decide to proceed, then simply contact them and tell them so. They will take care of all of all the paperwork for you and will keep you updated as to what is happening at any given time. You can relax and wait for your money to become available safe in the knowledge that you have an experienced and professional person acting on your behalf.