If you’re over the age of 55, you might be eligible to release equity from your home, which can help fund your early retirement.
It is critical to seek the most acceptable financial guidance from an equity release expert to guide you through releasing equity from your home.
In this article, Equity advisor John Lawson answers your burning questions, walks you through the process, and assists you in finding the best provider for an accurate equity release quote.
- What’s Equity Release & How Does It Work?
- Types Of Equity Release
- What Can I Use Equity Release For?
- Where To Seek Equity Release Advice?
- Top 7 Equity Release Companies
- Why Your Need Equity Release Advice
- In Conclusion
What’s Equity Release & How Does It Work?
An equity release mortgage is a loan secured by your home’s equity. It is intended for senior homeowners who want to receive a lump amount, recurring payments, or a mix. When the final homeowner dies or moves into long-term care, the sum borrowed plus interest is repaid from the sale of your property.
Types of Equity Release
There are generally two types of equity releases to consider:
Lifetime Mortgage:
You’ll get access to equity while maintaining complete control of your inheritance.
Home Reversion Scheme:
In return for selling all or a portion of your estate to the lender, you will receive cash.
What Can I Use Equity Release For?
You can utilise the equity release for many purposes.
It’s typically utilised for house upgrades, income supplementation, or long-term care.
Equity release can also assist you in managing your debt or repaying a mortgage.
Where To Seek Equity Release Advice?
The Equity Release Council, the industry trade association for equity release, is a fantastic location to start your search for an equity release consultant.
Its members have pledged to follow the organisation’s code and the FCA’s guidelines.
So can utilise its website’s Find a Member function to narrow down your search for a local equity release adviser.
Before hiring an adviser, make sure they are registered with the Financial Conduct Authority (FCA).
This guarantees that if you have a problem, you may go to the Financial Ombudsman Service, which can examine complaints on your behalf and perhaps arrange for compensation to be paid if it finds incompetence.
Top 7 Equity Release Companies
Age Partnership
Age Partnership Equity Release was founded in 2004 and provides a customised selection of equity release and lifelong mortgage options.
It has received several honours and has a trust score of 97% on multiple independent review sites.
Nationwide
Nationwide is a brand-new independent player in the equity release industry (in November 2017). With around 15 million members, it’s the UK’s highest-rated building society and is now one of the leading lifetime mortgage providers.
Legal & General
Legal & General (L&G) is one of the world’s major equity release and lifelong mortgage plan providers and a significant pension fund asset manager in the United Kingdom.
Aviva
Since 2000, Aviva equity release, one of the most prominent lifetime mortgage providers in the UK, has offered lifetime mortgage programmes to over 150,000 customers.
Liverpool Victoria
Liverpool Victoria, often known as LV=, is a financial firm in the United Kingdom, with over one million clients who have unlocked the value of their home through equity release and lifelong mortgage schemes, gaining access to a tax-free cash lump payment or drawdown option.
Just
The organisation, formerly known as Just Retirement Equity Release and formed by a combination of Just Retirement and Partnership Assurance, provides three-lifetime mortgage programmes.
More 2 Life
More 2 Life equity release was founded in 2008 and is regarded as the most notable pioneer in the lifetime mortgage sector and one of the significant UK-based equity release firms.
Why You Need Equity Release Advice
The rationale for seeking an equity release council is to ensure that you completely grasp the implications of taking up a lifelong mortgage or home reversion plan for you and your family.
While equity release may provide you with access to cash that you would not have had otherwise, there will be a cost that might significantly diminish the amount of money you can leave as an inheritance when you die.
For example, with a lifetime mortgage – the most typical type of equity release – some or all of the interest accumulates during the life of the loan, implying that the longer you live, the larger the debt will rise.
A no negative equity guarantee ensures that you will never owe more than the property’s value.
In Conclusion
While releasing equity from your home may appear to be the ideal solution for you, it is critical to examine all the benefits and drawbacks before deciding if equity release is the proper financial decision for you.
If you want to learn more about equity release arrangements in 2022, research the plan that best matches your position or read various reviews on equity release schemes.
Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence.
