Equity Release Eligibility

Equity Release Eligibility

Equity release eligibility refers to the eligibility of individuals seeking an equity release mortgage within the UK. Only individuals over the age of 55 are qualified for equity release eligibility. An equity release scheme presents mature individuals with the opportunity to obtain a substantial amount of finance by holding a loan against the value of the home.  Equity release is a method used for individuals who hope to achieve financial stability, or simply need extra funds to contribute to life-long personal aspirations. We have a team of specialist equity release advisers, who will inform each client on the guidelines and the boundaries for equity release eligibility, as well as finding a suitable and affordable equity release plan for each client.

Individuals who qualify for equity release eligibility are provided with two main products; lifetime mortgage schemes and home reversion plans. All equity release arrangements are terminated under the circumstance that the borrower dies, or is indefinitely transferred to a care institution.

Lifetime mortgages work on the principle that the borrower is required to repay the total amount borrowed, often with additional interest. For those that qualify for equity release eligibility, lifetime mortgages consist of three alternative sub-schemes; interest only schemes, interest rollover schemes and home income plans.

Interest only schemes do not necessitate the borrower to repay the full mortgage debt until the death of the plan holder occurs, yet interest rates are paid every month. Interest rates can be fixed or variable.

Interest rollover schemes guarantee the borrower lifetime occupancy without making any form of repayment for the remainder of their life. However, interest accumulates on a monthly basis and this added to the mortgage debt, which is repaid at the end of the contract.

Home income plans give the borrower the opportunity to use the income generated by the mortgage to purchase an annuity, presenting a lifetime income for as long as the contract lasts. The income will be useful for repaying mortgage and interest on a monthly basis. Clients who qualify for equity release eligibility are able to seek assistance from our specialist advisers when deciding between the three forms of lifetime mortgage equity release.

Another arrangement available to clients who meet the criteria for equity release eligibility is the home reversion plan. This scheme works in the same way as lifetime mortgage in the sense that the borrower is entitled to an initial cash lump sum.  However, the homeowner consents to handing over ownership of the property to the equity release provider, merely making the borrower a tenant in their own property. The borrower does not have to reimburse any money to the provider and is also guaranteed lifetime occupancy within their own residency. A full home reversion grants the provider to all the property’s share, whilst a part home reversion equity release plan enables the borrower to preserve a proportion of the properties’ share. The house is sold at the market price by the equity release plan provider, after the borrower has died.

Arranging an equity release plan produces a number of advantages on the plan holder’s behalf, such as the guarantee of lifetime occupancy for the plan holder. However, there are many limitations coupled with equity release plan products, such as the potential debt which may mount up from equity release mortgages. Additionally, individuals who are currently entitled for state benefits may be limited to the amount they receive, due to newly-found income in the form of annuities.

It is essential for individuals, who meet the requirements for equity release eligibility, to seek assistance when searching for an equity release scheme that will contribute to fulfilling their individual needs. Our specialist equity release advisers are willing to support each client when seeking equity release plans.

If you believe you qualify for equity release eligibility, call our financial advisers today.

How to get in touch

Feefo logo

This is a lifetime mortgage. To understand the features and risks, ask for a personalised illustration.

CHECK THAT THIS MORTGAGE WILL MEET YOUR NEEDS IF YOU WANT TO MOVE OR SELL YOUR HOME OR YOU WANT YOUR FAMILY TO INHERIT IT. IF YOU ARE IN ANY DOUBT, SEEK INDEPENDENT ADVICE.