Equity Release

Equity Release is a great way of releasing the wealth tied up in your property,
without having to sell it and move to another home.

Releasing Equity In Your Home

Equity release schemes offer a financial safety net for people over the age of 55. In releasing equity from your home, it can make a significant change to your standard of living in retirement.

With so many types of equity release schemes available, it’s imperative that professional advice is received.

Equity Release Schemes – An Overview

Lifetime Mortgages

Lifetime mortgage schemes now offer the most popular route into the London equity release marketplace. They come in various flexible formats such as drawdown, enhanced and interest only. Lifetime mortgages work by the lender securing a charge on the homeowners London property in return for a tax-free lump sum, similar in principle to a residential mortgage. However, the difference between the two lies in the fact that a lifetime mortgage scheme doesn’t start until age 55 & therefore is geared towards people approaching or already in retirement.

Enhanced Lifetime Mortgages

The concept of the enhanced lifetime mortgage has been around for over a decade, however it is only until now that more lenders are beginning to feature this product as part of their mainstream offering. Taking health & lifestyle into account a lifetime mortgage provider can decide whether to apply enhanced mortgage rates to any equity release application. Thus by enhancing equity release schemes the lender will offer a greater tax-free lump sum than the standard terms.

Drawdown Lifetime Mortgages

The drawdown lifetime mortgage scheme is a special form of lifetime mortgage which has proved to be the most popular plan in the equity release market today. The reason being is the drawdown lifetime mortgage’s flexibility in being able to control how much equity to release, and when. This ultimately has a bearing on the final balance & important for all beneficiaries concerned.

Interest Only Lifetime Mortgages

Equity release schemes have traditionally either been a roll-up lifetime mortgage, or a home reversion. However, in 2006 the mold was broken by Stonehaven, who introduced the first equity release interest only lifetime mortgage. Rather than making no repayments, seeing the interest compounding & balance increasing, Interest Only Lifetime Mortgages provided the facility to repay some, or all of the interest on a monthly basis. Since then, more companies offer such retirement solutions.

Home Reversion Plans

The home reversion plan was the forerunner of today’s equity release schemes. Simple in concept, it basically allows any London homeowner to sell a percentage of their property in order to raise a tax-free cash lump sum. The size of the lump sum is determined by the amount of the property that is sold to the home reversion company, the age of the homeowner & the value of the property. Following transfer, the homeowner effectively becomes a tenant with the capacity to remain in the property for the rest of their lives via a lifetime tenancy agreement.

Retirement Mortgages

The Retirement Mortgage has led to the equity release market becoming a safety net for many of those in need of an escape route from mainstream lenders reigning in their mortgages nearing, or in retirement. This is because equity release schemes commence at age 55 and have now adapted to provide access to products such as the interest only retirement mortgage as well as the interest roll-up retirement mortgage.

If any of the above equity release schemes and retirement mortgages are of interest, please do not hesitate to contact Marylyn Melbourne who will be able to help with any additional queries you may have.

Find out how much equity you could release in your home

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    Marylyn Melbourne Financial Adviser Ltd is authorised and regulated by the Financial Conduct Authority FCA No – 912198. Registered as a business in Scotland - Registration No: SC636526. Business address: 19 Primrose Avenue, Rosyth, Dunfermline, Fife KY11 2SS. The guidance contained within the website is subject to the UK regulatory regime and is therefore primarily targeted at customers in the UK.

    Investments/Pensions: The value of investments and pensions can fall as well as rise, and you can get back less than you invested. Tax Planning: Tax planning is not regulated by the Financial Conduct Authority. Mortgages: Your home may be repossessed if you do not keep up repayments on your mortgage. There may be a fee for mortgage advice. The precise amount will depend upon your circumstances. Equity Release: This is a lifetime mortgage. To understand the features and risks please ask for a personalised illustration. Will Writing: Unless you make a will, you cannot guarantee that your belongings will be distributed as you want when you die. If you die without a Will (Intestate) your family has to sort out many administrative items and are obliged to the decisions made by law as to who inherits what, decisions you should have really already made by writing a Will. Will writing is not regulated by the Financial Conduct Authority.