The equity within your property is the market value of your home minus any debts that have been secured against it. Equity release products generally fall within two generic categories of Lifetime Mortgages and Home Reversion Plans. Equity release schemes allow older borrowers to access the equity built up in their properties over time.
This is the most common type of equity release scheme. A lifetime Mortgage enables clients, usually aged over 55 years of age, to release equity from their main residence. The mortgage, typically has no end date, allowing clients the choice to service the interest or ultimately roll this up on a compounded interest basis and added to the cumulative debt. As the Lifetime Mortgage is open-ended, any outstanding amount is repaid from the estate on death when the property is sold or if the property is permanently vacated due to long term care needs. Clients’ can release a cash lump sum or utilise drawdown facilities available from most lenders.
Home Reversion Plan:
A home reversion plan is essentially, a contract under which a proportion of the main residence, or in fact the whole property is sold to a finance provider, rather than the mortgage of it: this can be anything between 25% – 100% of your home.
Typically, available to older clients aged 55 and over, allowing the occupant to retain right of occupation for life or until the occupant permanently vacates the property. The reversion provider grants a lifetime lease, thus allowing the seller to live in the property rent-free.
As home reversion plans involve the sale of the property or part of the property, these plans must be thought through fully and applicants and beneficiaries should seek suitable guidance and legal advice before entering into such an arrangement.
Our expert team can guide and provide you with the best support, information and product options to ensure you make the right decision. The brigade of professional advisers within our team and Network regularly join together to host client friendly webinars that illustrate the pros and cons: disperse the myths whilst simultaneously repositioning the facts about modern day Equity Release – don’t delay, get in touch with the team today!