What is Equity release and how does it work?
Equity release is a financial scheme that allows homeowners, typically those aged 55 or older, to access the equity tied up in their properties without having to sell their homes. There are two primary forms of equity release: lifetime mortgages and home reversion plans.
Lifetime Mortgage: With a lifetime mortgage, you take out a loan secured against your property. You can receive a lump sum, regular payments, or a combination of both. The loan and any interest accrued are repaid when you (or both you and your partner) pass away or move into long-term care. The house is then sold, and the proceeds are used to settle the loan. If there’s any money left after repaying the loan, it goes to your estate.
Home Reversion: In a home reversion plan, you sell a portion or your entire home to a home reversion provider in exchange for a lump sum or regular payments. You can continue to live in the property, often rent-free, until you pass away or move into long-term care. When the house is sold, the proceeds are shared between you and the provider based on the proportion of ownership you’ve sold.
Equity release can offer financial flexibility in case you are retired, but it’s essential to consider the impact on your estate and inheritance for your loved ones. Get advice from our localised mortgage senior experts on your personal situation before booking anything! It’s always better to get an experts opinion on such personal finance matters.
How can Equity Release help you?
Releasing your equity is like having a flexible financial friend. You can use the money for various things – from home improvements to giving early inheritances or clearing your existing mortgage, etc. Plus, here’s the beauty of it: you don’t need to pay it back until the last homeowner on the deeds passes away or requires long-term residential care.
If you don’t want to part with your family home but need extra money, especially for your retirement, equity release is a smart choice. Our dedicated team at Monefi is here to make it simple and guide you through every step. Click below to book your free consultation today and don’t miss on making the most of your own equity. Let your existing assets ease your life for good.
Are You Eligible for an Equity Release?
Your eligibility for equity release depends on these 6 key factors:
The minimum age for equity release is typically 55 or 60, but it can vary depending on the specific plan and provider. It’s essential to check with your chosen equity release provider for their age requirements.
Your home must meet a minimum value threshold of at least £70,000 and it’s in reasonable condition.
In most cases, equity release plans typically allow a maximum of two applicants. These applicants are usually the homeowners who jointly own the property for which the equity release is being considered
You must be the owner of the property, and it should be your primary residence for over 6 months of that year.
Generally, your home should be in England, Scotland, or Wales, although some lenders may consider Northern Ireland and other islands.
While ‘standard construction’ homes, like those made of bricks or stones with pitched tile roofs, are commonly accepted, some lenders may consider other construction types. Its advisable to book a call and get clarity on this by Monefi’s mortgage experts.
The benefits of the Equity Release we offer:
Your financial security is our priority!
How can Monefi assist you through Equity Release?
Expert Guidance at Your Fingertips:
When you connect with us, our dedicated team will first confirm your eligibility for our lifetime mortgage. An FCA regulated equity release advisor will then provide you with important details like benefits, costs, and risks based on your circumstances.
Discuss it with your family:
Have an open conversation with your family to discuss your plans. Monefi’s friendly team will be able to answer all your queries and concerns before proceeding with the equity release.
Application in Progress:
Once you have cleared all your doubts, you’ll complete the application with Monefi’s equity release advisor. We’ll arrange for an independent property valuation, and upon meeting the necessary criteria, we’ll notify you of the approved amount.
Awaiting your equity release offer:
After assessing your application, we’ll send you an offer that spells out the borrowing amount. This step will be thoroughly reviewed with your equity release advisor and solicitor. At this stage you will have to sign the necessary legal documents.
Funds transferred to your account:
With all the pieces in place, your funds will be smoothly transferred to your bank account through your solicitor.
How long does a lifetime mortgage take?
Efficient Process, Timely Results:
For straightforward cases, the timeline from applying for a lifetime mortgage with us to having the funds in your bank account typically spans 8 to 10 weeks. It’s a swift and efficient journey to your financial goals.
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Frequently Asked Questions.
Can’t find what you’re looking for?
Typically, you can expect to receive between 20% and 60% of your home’s market value (or the portion you decide to sell). When contemplating a home reversion plan, it’s essential to consider:
– The possibility of releasing equity in multiple payments or as a single lump sum.
– The minimum age requirement for initiating a home reversion plan.
Although there aren’t inherent dangers or pitfalls, it’s vital to recognise that equity release will diminish the inheritance you can pass on to your loved ones. Similar to conventional mortgages or borrowing arrangements, you’re obliged to repay the borrowed amount, along with the accumulating interest, at a later date. It’s a financial commitment to be aware of.
Typically, the repayment of the lifetime mortgage occurs when the house is sold. If you decide to move into long-term care, you or your solicitor will oversee the sale process. In the event of your passing, if you have a will, an executor will handle the sale, or if you don’t, administrators will manage it. Any remaining funds from the sale belong to you or your estate.