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Coast Financial, your local equity release experts.

If you’re retired and living on your pension you may be considering Equity Release as a way of getting cash from the value of your home. If you own your own home and are 55 or over, you may be thinking about equity release because it could provide you with a lump-sum, additional income or maybe both. Perhaps this is because your pension income isn’t simply enough on its own?

See how much you can borrow. For a guide to the maximum amount you could potentially release from your home, why not ask us now? Feel free to call us for a free, no obligation initial meeting. For your peace of mind, we only recommend schemes that meet the criteria of the Equity Release Council.

A house sat on money that could be used for equity release

Before considering equity release

It’s important to check whether there are other ways you could meet your financial needs before choosing an equity release scheme. Some ways might be to:

  • claim any benefits you might be entitled to or check to see if your local authority can help you to pay for essential home improvements
  • trace any pensions you may have lost track of, using the Pension Tracing Service
  • use your savings or sell your investments first, but find advice before doing so
  • sell up and buy somewhere smaller and cheaper (downsize)

What is equity release?

The Equity Release market has been a rapidly growing market in England with record amounts released last year (£1.6 billion) and a record number of 22,500 taking out an equity release scheme in 2015.

Equity release describes a range of products only available to you if you are older, typically over the age of 55. They allow you to release the equity (cash) tied up in your home. The products have no fixed term and allow you to stay in your home for the rest of your life, unless you have to move into long term care.

These schemes can be helpful in certain circumstances but are not suitable for everyone. For example, they can be expensive and inflexible if your circumstances change in the future and may affect your current or future entitlement to State or local authority benefits.

Equity Release Products

Schemes include Interest Only Mortgages and Home Reversion Schemes, but the most popular are Lifetime Mortgages. With a Lifetime Mortgage, you take out a loan, secured on your property, and receive that amount as a tax-free cash. You do not usually make monthly repayments with lifetime mortgages. Instead, the interest “rolls up”, and the loan plus interest is repaid after your death, when the property is sold. Alternatively a Drawdown Lifetime Mortgage can be opted for, which lets you drip-feed the money over a longer period.

Releasing equity from your house will reduce the value of your estate so it could actually reduce your Inheritance Tax bill when you die.

When considering equity release, you may come across sale-and-rent-back schemes. Watch out as they are not a type of equity release.

The Mortgage Market

The mortgage market is much more accommodating to later life borrowers these days – and as such, there are a range of products available that allow you to release some funds without permanently reducing the value of your estate. Retirement interest only (RIO) mortgages are an example of this. A financial advisor like ourselves can go thorough these options with you, to help making the right choice.

A couple considering equity release

How does it work?

You can either borrow money which is secured against your home, or sell part or your entire home. This can give you a lump sum, a way of topping up your income, or both. You are more likely to qualify for an equity release scheme if you have no current mortgage, or if any mortgage you have is relatively small.

Independent Equity Release Advice

Equity release schemes are very complex and you should always consider taking professional advice from financial advisors before making any commitment. We can help discover how much money you could release across all the available equity release plans, making sure we get the right equity release plan for you.

For more information or financial advice on any of our financial services contact us on 01752 666165 for a confidential personal quotation.

Contact us for advice in plain & simple English. Or for more information, download the guide now.