The value of your home less any outstanding loans on it is your 'equity'. Equity release is the process whereby this is turned into cash, which you can then spend on whatever you like.
Because the equity is yours in the first place, there is no tax to pay on the funds you receive, and there are no regular repayments to make. With a lifetime mortgage, which is the most popular form of equity release, you continue to own 100% of your home throughout.
If you are a homeowner, aged 55 or over, you could be eligible to take advantage of the rise in house values by releasing equity from your property. This can significantly improve your standard of living - enabling you to benefit from the comfortable retirement that you deserve.
Because the money that is obtained is yours in the first place - you're simply 'releasing' it - there is no tax to pay and the funds are yours to spend on absolutely anything you choose. Whether you wish to treat yourself to the holiday of a lifetime, help your kids onto the property ladder or simply improve your standard of living by clearing your mortgage or paying off personal loans, there are no restrictions.
In simple terms, the additional disposable funds that you can obtain through equity release allow you to enjoy a more comfortable retirement. Furthermore, you can have the opportunity to live out many of the dreams that you longed to fulfil whilst you were working or raising your family.
The most common misconception about equity release today is that you have to give up ownership of some or all of your home. This is not the case. Well over 95% of our clients elect to take out a modern form of equity release known as a lifetime mortgage or drawdown lifetime mortgage. With both of these plans, you release a proportion of the equity in your property whilst continuing to own it 100%. This means that you continue to benefit from any increase in your property value in the future.
Also, all of the plans that we recommend must follow the regulations set out by the Safe Home Income Plans (SHIP) organisation. As such, they are all 'portable', so you can still move home, taking your equity release plan with you.
Although there are now many safeguards to protect you, the borrower, you should still ensure that you are aware of all of the implications before entering into a plan. The following are some points to consider:
Your tax position and eligibility for means tested benefits may be affected, the value of your estate may reduce as might your options for moving or selling your home in the future.
Simpsons have helped many people afford a more comfortable retirement through Equity Release - contact us for more information.