Equity Release Solutions

Equity Release Solutions

Equity Release Solutions

Equity release solutions are solutions sought by individuals looking to secure their long term financial future through either a lifetime mortgage or home reversion scheme, aimed at freeing up extra finances in order for individuals to pursue other projects. Equity release solutions are typically taken up by individuals looking to pursue a dream through a holiday, helping to assist their day to day lives, freeing up funds for care or alternatively to help fellow family members during periods of economic difficulty. Our advisers are dedicated in providing clients with suitable and affordable equity release solutions.

As mentioned previously, there are typically two main forms of equity release solutions sought by individuals in the form of lifetime mortgage or home reversion solutions. A lifetime mortgage can come in three forms:

Interest rollover – The borrower lives in the property until death or moving into a care home without charge, although the interest calculated on the property builds up to find a total sum. This product is typically not suitable for younger equity release seekers.
Interest only – This product sees the borrower not need to pay the full loan until the end of the plan holder’s life, although interest rates are paid on a monthly basis on a variable or fixed rate basis.
Home income plan – Typically a plan sought by individuals over 80, the borrower uses the mortgage to purchase an annuity and provide themselves with a fixed income for the remainder of their lives or until they are moved in to a care home.

In addition to the lifetime mortgage equity release solutions available to certain individuals within the UK, home reversion solutions may also be a suitable and affordable way for individuals to obtain increased equity and not damage their long term financial future. A home reversion plan can be found on either a full or a part home reversion basis, seeing an individual obtain equity in their property by selling their property to a specialist company and living in the property until death. At that point, the property involved moves to the provider, who then sells the property as a market sale.

With the over 55s only eligible to apply for equity release solutions in the UK, it is likely that the undertaking of equity release solutions will have an impact on an individual’s family plans or inheritance solutions. As a result of the significance of an equity release solution, all individuals should seek advice and guidance required to obtain the optimum financial result for their individual needs and requirements.

Although there are a number of advantages attached to equity release solutions – such as the ability for an individual to live in their home until death – there are a number of negatives and costs attached to each package. Individuals should be wary of the potential debt and interest which can accrue from certain equity release solutions if they were live for a substantial period of time. Furthermore, individuals obtaining state benefits in the form of pension credit, savings credit and council tax benefit are all likely to be affected by obtaining an equity release package, with extra income being received on a means tested basis, many of these benefits will not be available to individuals. With our help, individuals will be able to weigh up the potential cost and benefits of equity release solutions and choose a plan that has the most appeal to them.

It is vital that all seekers of equity release solutions think particularly carefully about their financial situation before seeking the equity release solution they desire. Moving out and into a smaller property may be a more beneficial way of freeing up extra finances for clients, whilst obtaining a loan from family or friends as well as seeking a grant from their local council could also be a more suitable and more long term affordable plan than an equity release solution. The advice of an independent financial adviser should be sought for all equity release solutions, as well as the consent of friends, family and anyone closely associated with the life of the individual seeking equity release solutions. Our advisers take pride in assisting clients on equity release solutions, ensuring the appropriate equity release plan, suited to their needs.

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