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What Are My Equity Release Options?


So, you own your property, and you’ve made it just about perfect for you and your needs. Everything seems to be going well, and - out of the blue - something bad comes up to try and ruin things for you. Unfortunately, it means having to get hold of some extra cash: something to which you don’t have easy access. What do you do?


Many people in this situation think about using equity release. It means that you can use one of your most significant assets - your home - to get some financial support for whatever you’re looking to deal with right now. Is it an option for you? This is what your equity release options could be.


What is equity release?

An equity release scheme lets someone access their property’s value so they can have more cash in retirement. This can seem like an attractive proposition if you have an unexpected expense to pay, or if it looks like you’ll have a pension shortfall.


There are two main types of equity release that are available. One is lifetime mortgages, which means you can borrow money against your home, and home reversion lets you sell a share in your property. If you’re not sure which option might be the best one for your needs, visit The Equity Release Experts and find out what your next steps could be.


Lifetime mortgages

These are the most common types of equity release plans. If you decide to go for this option, then you will be able to borrow a sum of money that’s secured against your home. You wouldn’t usually make any repayments on this while you’re still living in your property - unlike a standard mortgage, where you would make monthly payments on the capital and interest.


Your loan, plus the interest that’s accumulated on it, will be paid from the proceeds of your property when it is sold when you move into long-term care, or you pass away. Your equity release provider should offer you a no-negative equity guarantee, so the amount owed will not exceed the value of your property.


Home reversion

Using this type of plan means that you sell your property to a private company. In return, you will then get either a regular income, a lump sum - or a combination of both.


A home reversion plan should mean that you can remain living at your home either until you pass away or move out. Your provider will generally pay you 30% to 60% of your property’s market value because you will still be living in it.


The amount that you could receive will depend on several factors. This will include how old you are, as well as how long your provider expects you to stay at the property or how long you may live.


You will need to sign a lease or tenancy agreement so you can stay living in your property once it has been sold to a home reversion plan provider. You may also have to pay a nominal amount of rent - such as £1 or £2 a month.


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