The value of your home minus any outstanding mortgage on it can be described as your ‘equity’. Equity release is a process that allows you to release this cash from your home. If you go ahead with an equity release mortgage then you receive a tax-free cash lump sum or extra income, which you can spend in any way that you choose (home improvements, vacations, paying off debts, help family, etc.). As you are not actually selling your home, then you can continue to live in it.
A lifetime mortgage is the method that most people use to release the equity in their home. Using this approach, you take out a loan against the value of your property. Interest does accumulate on the loan, but you do not have to make any monthly repayments. You do not have to pay back any money at all whilst you are alive. The lender gets their money back only after your death, at which point the house must be sold.
Your age, how much your home is worth, and the amount remaining on your current mortgage will determine how much cash you will receive. To get a general idea of how much cash you may be able to release from your home, then you can use an online equity release calculator. They are free to use and are pretty accurate. Just enter in some general details about yourself and it will give you an estimate based on how much people in similar circumstances to yourself have received in the past.
If you are seriously interested in equity release, then you should get independent advice, as although equity release can provide you with financial freedom, it is not always the right decision for everyone. You should be able to get a free initial no-obligation consultation with a personal independent adviser, who will assess your individual circumstances and tell you whether an equity release plan is the best option for you.
Your independent adviser will present their research to you and give you a copy of their findings so that you can review them in your own time. They will provide reasons for the course of action that they recommend. All figures and costs will be plainly laid out too. They are legally bound to tell you everything that is relevant to the transaction, so you can rest assured that they cannot defraud you out of your money.
You do not need to give your equity release advisor an immediate decision. If you do decide to proceed, then simply contact them and tell them so. They will take care of all of all the paperwork for you and will keep you updated as to what is happening at any given time. Up until, and even after, the time that you receive your money, they will act as your full representative.
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