Equity Release
Equity Release allows you to extract value from your home for a variety of reasons.
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0121 213 4756
Vass Koni – VK Financial, Director
Equity Release allows you to extract value from your home for a variety of reasons.
Things to be aware of:
- Releasing equity from your home is a lifetime commitment with the debt only expected to be repaid once your home is sold, usually when you and your partner pass away, or when the home is vacated and a move is made into long term care. If you do decide to pay the loan back early; early repayment charges may apply.
- An Equity release arrangement may affect your entitlement to state benefits and could affect your tax position.
- Equity release schemes could reduce the value of your estate. You will be encouraged to invite or involve your family members to attend your free no-obligation initial consultation, as any decision you take can have a legacy impact on them. This will give them an opportunity to ask any questions that they may have as well as offer you reassurance in the decision making process should you so require.
Equity release will involve a home reversion plan or lifetime mortgage which is secured against your property and will reduce the value of your estate and impact funding longā -ā term care. To understand the features and risks ask for a personalised illustration.
Equity release requires paying off any existing mortgage. Any money released, plus accrued interest is to be repaid upon death, or moving into long-term care.
Equity release will affect potential inheritance and your entitlement to means-tested benefits both now and in the future.
Lifetime Mortgages
Age is a factor when taking a traditional mortgage, but it isnāt a barrier when considering Lifetime Mortgages.
A Lifetime Mortgage is a type of Equity Release that may allow you to take a long-term loan against the security of your home.
If you are over the age of 55 and own your own home in the UK (not including the Isle of Man or the Channel Islands), you could borrow a one-off cash sum, or you could borrow an initial lump sum, and set up a cash reserve to draw from whenever you like (a drawdown facility).
The amount of cash you can get will depend on factors such as your age, health and property value. Before you take out equity release, you’ll need to speak to our equity release adviser. You will be provided with a personalised illustration and we will talk you through the benefits, costs and risks.
A lifetime mortgage is not appropriate for everyone. Taking out a lifetime mortgage could reduce the inheritance due to your beneficiaries as well as affect your tax position and your eligibility for some state benefits.
Drawdown Lifetime
If you would rather take gradual amounts instead of a lump sum then a drawdown facility or cash reserve facility can be factored into your Lifetime Mortgage.
A drawdown or cash reserve facility, can offer flexibility for you to draw money as and when you need it. This is often a cost-effective option, as you will only pay interest on the cash you draw down.
You will still own your own home and can live in it until you die or move into long-term care, subject to provider terms and conditions. This applies to both borrowers on joint lifetime mortgages.
Home Reversion Plans
Home Reversion Plans are not for everyone but they remain an option in some instances.
This plan allows you to sell part or all of your home while you continue to live in it.
A HRP involves a sale of part or all of your property to a Home Reversion Company. The reversion company is then entitled to the sale proceeds of that share of the home when your home is sold ā usually after you die or move into permanent care. Home Reversion companies may not pay the market rate, so your estate might be significantly reduced if you die shortly after taking out the plan. If you donāt sell 100% of your property to the reversion company, then the percentage of the property you own can be a left as an inheritance to your loved ones.
Retirement Interest Only
These products can be an alternative to traditional Equity Release products for those who eligible and who may also not comfortable with interest roll-up.
A retirement interest only mortgage is a loan secured against your home. You pay the interest each month and this means the amount you owe will not increase as time goes on.
These products are designed to meet the needs of those who may need the help of a mortgage to release equity from their home without the cost of interest roll up, want to refinance to reduce monthly payments until they no longer need the property to live in or those who have reached term end on an existing interest only basis and cannot repay the capital.
These products are assessed much like a traditional mortgage where income and age are taken into account; as is credit profile and property criteria.
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Thomas Anthony Financial Services Limited, registered in England no. 05065805. The company is registered at 573 Chester Road, Sutton Coldfield, W Midlands B73 5HU.
VK Financial is a trading style of Thomas Anthony Financial Services Limited which is authorised and regulated by the Financial Conduct Authority. We are entered on the Financial Services Register under no.993172 atĀ https://register.fca.org.uk
The information contained within the website is subject to the UK regulatory regime and is therefore primarily targeted at customers in the UK.
Should you have cause to complain, and are not satisfied with our response to your complaint you may be able to refer it to the Financial Ombudsman Service which can be contacted hereĀ https://www.financial-ombudsman.org.uk/contact-us
