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What is Equity Release

If you're aged 55 and over and own your home, you can unlock the value in your home and turn it into cash. Equity release allows you to continue living in your home while enjoying the influx of much-needed cash at hand.

 

There are two types of equity release, Lifetime Mortgages and Home Reversion plans.  Both are regulated by the Financial Conduct Authority (FCA).  Depending on the type of product you choose, you can either release a lump sum or regular smaller sums of money from the equity of your home.

 

Equity release schemes can offer a way out of a difficult life situation and help you secure a more financially-sound retirement. Whether you’re looking to clear an existing mortgage or debt, make home improvements, help family with an early inheritance or a deposit for a home – releasing equity can provide financial security for yourself and the ones you love.

 

Using Money Depot will enable you to learn about the equity release options available to you and help you decide if they are right for you. When you register with us , you gain access to a large network of pre-vetted independent financial advisers who can work with you and assist you in understanding the implications of your decision.

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WARNING: Equity release reduces your estate’s value and may affect any means-tested benefits you’re eligible for. A lifetime mortgage, which is a loan secured against your home, is the most popular form of equity release and you will still own your home. Think carefully before releasing equity and make sure it’s right for you.

Lifetime Mortgage

A lifetime mortgage is a suitable alternative for homeowners who want to retain ownership of their property.  It is secured against your home and the interest is compounded. In exchange, you receive a cash-lump sum or smaller amounts from the equity (or value) of your property.

There are a number of different lifetime mortgages available on the market which we show you in detail in this section of the website.

 

These include:

  • Lump-sum lifetime mortgages
  • Interest-serviced lifetime mortgages
  • Drawdown lifetime mortgages

 

One of the main benefits of a lifetime mortgage is that you retain ownership of your home and can continue to live there until your death. Meanwhile, both the loan and the compounded interest are repaid by your estate when you die or move into a long term care facility.

 

If you are married or in a civil union, repayment begins only after the last remaining person living in the home either dies or moves into care.  This means that both you and your partner can live in your home for the rest of your lives without financial stress.

 

Whether you decide to receive the funds as a one-time sum or in smaller installments, a lifetime mortgage can help you meet your day-to-day needs and being prepared for unexpected life events.  You can also increase the amount you have borrowed at any given time, up to the maximum agreed limit with the plan provider.

 

If you choose to protect some of the value of your property as an inheritance for your family, you are able to release some equity now for your use while still retaining something to pass onto your children or grandchildren.

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Home Reversion

If you’re looking for a way to access some or all of your home’s value - a home reversion plan may be right for you.

 

A home reversion plan lets you sell all or part of your property but continue to live there rent-free for the rest of your life. It unlocks the value of your home and lets you take out a tax free lump sum or regular payments with the added benefit of a lifetime lease.

 

Many homeowners prefer home reversion in today’s volatile real estate market and changing economic landscape. This is because it provides an additional layer of security, letting you retain the same percentage of ownership in your home regardless of property values.

 

At the end of the period, your property is sold and the proceeds are divided according to the remaining proportions of ownership.  You can use the remaining equity to ensure a more comfortable retirement or leave it for your loved ones in a will.

 

Whether retirement seems far off or just around the corner, home reversion can get you the peace of mind and ensure you and your family are financially covered.

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