There is only one subject for me to write about this week and that’s “Equity Release”. At Mortgage Required, we get all sorts of enquiries, but never before have we had so many enquires of this nature. It seems that so many retired people are “asset rich / penny poor” and they are looking for a way to get their hands on some of their equity.
Equity Release is way for pensioners to release the money tied up in your home, without having to sell it or move out of it. You can either borrow against the value of your home which is known as a Lifetime Mortgage, or sell part or all of it in exchange for a lump sum, which is known as Home Reversion.
Back in the day, Equity-Release was a dirty word, with visions of loan shark types charging exorbitant rates of interest then throwing vulnerable pensioners out on to the streets, whilst simultaneously nicking their properties. Well not any more. First of all there has been a whole host of sensible (in my opinion), regulation. The main worry people have is losing their home. The amount of money you borrow plus any rolled-up interest, can never go above the value of your property - when it is sold at the end of your plan - due to the No Negative Equity Guarantee safeguard upheld by the “Equity Release Council.” Borrowers will also continue benefiting from the rises in property value in the years to come.
It’s interesting to hear the different reasons why people do Equity Release. The usual 2 are to gift a deposit for sons / daughters property purchase or just to have the money in cash in their accounts to enhance their lifestyle, take a holiday, buy some treats and not have to worry if something goes wrong. In fact my parents did Equity Release 12 years ago, and their retirement has been enriched enormously with endless trips to Fuengirola and the peace of mind having money in the bank brought them.
There are all sorts of schemes available, some where you make payments every month and some where you don’t. There fixed rates, variable rates and interest only deals available, so there really is something for everyone!
For more information contact us or speak to a mortgage adviser on 01628 507477.
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