Equity release allows you to release tax-free money from your property. This can be especially helpful if you need to free up some money but don’t want to downsize or move house.
Additionally, you can choose to receive your money as a lump sum payment or in smaller regular instalments. To be eligible you must be 55 years or over and your house must be worth at least £70,000.
However, equity release can often appear complicated and confusing and can also have a significant effect on the value of your estate. It is therefore important to consider all options and choose the right plan to meet your individual needs and circumstances.
At Cotswold Independent Financial Services our expert financial advisers will help you to fully understand your available options and to find the right equity release product to suit you.
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There are a number of reasons you might be considering equity release and the good news is that you can spend the money on whatever you like. Some of the common reasons people consider equity release include:
• To have or supplement a retirement income
• To pay off debts
• To pay for long term care
• To help a family member get onto the property ladder
• Or simply to have a better standard of living
Equity release is becoming an increasingly popular option for financing the things that matter in life. This is supported by a report from the Equity Release Council which found that the equity release market is expanding rapidly.
With rising house prices in Coventry, the attractiveness of equity release has gone up in the local area. According to Rightmove, House prices in Earlsdon were up 5% in 2018 from 2017 and up and 12% from 2015. Most house sales in Earlsdon were terraced properties which sold on average for £215,682, while semi-detached properties averaged at £352,619. Flats had an average sold price of £149,212. Increasing values in property could mean that there will be capital left over after paying back the interest owed. This means more inheritance for your loved ones.
A lifetime mortgage is a loan that is secured on the property value (or future property value) of your home. You will still own your home and retain the right to live there for the rest of your life. The amount you borrow, plus accrued interest, is paid back from the sale of your home after death or if you move into long term care.
Home Reversion Plan
A home reversion plan is when a home, or part of it, is sold to a company in return for a lump sum or annuity. You retain a lifetime tenancy until death or the house is sold.
There are a number of things which you will need to carefully consider before releasing equity from your home, including that:
• there could be other alternatives more suitable for you
• future property prices could fall as well as rise
• it might affect your tax position
• it will reduce the value of your estate, which will affect the amount of inheritance you leave for your loved ones
• your home may be repossessed if you don’t keep up repayments on your mortgage
Our advisers will talk you through all the implications and how they will affect you, helping you to make well informed decisions.
Cotswold Independent Financial Services is a member of the Equity Release Council, a trade body who represent the equity release sector and “exists to promote high standards of conduct and practice in the provision of and advice on equity release”.