Which Equity Release

Which Equity Release

Which equity release is the most suitable or affordable for your individual needs and requirements? It is often a difficult task for individuals to ascertain which equity release mortgage plan will serve the most beneficial purpose towards their financial and personal ambitions. Equity release schemes offer individuals over 55 years old the prospect of obtaining finance by arranging a loan based on the value of their own home. We have a team of skilled financial advisers who will recommend which equity release package is most suited to each client’s needs and requirements.

When assessing which equity release offers most benefit to their ambitions, each client must be aware of the two predominant products of equity release available; lifetime mortgages and home reversion plans. All equity release contracts are concluded when the borrower dies, or takes occupancy at a care home indefinitely, due to deteriorating health.

An equity release that consents to the borrower repaying the mortgage at the end of the contract is known as lifetime mortgage. Lifetime mortgages can be defined into three separate schemes; interest roll-up schemes, interest only schemes and home income plans.

Interest roll-up schemes do not need the borrower to make any payments to the provider for the remainder of their life. Instead, interest is determined on a monthly basis and then added to the entire mortgage debt.

Interest only schemes function by allowing the borrower to pay the bulk of mortgage loan back to the provider after the contract is terminated, yet the borrower must make monthly payments of interest to the provider every month.

Home income plan schemes necessitate the borrower to pay back monthly repayment of mortgage and interest. The cash produced from the mortgage arrangement may be used by the borrower to obtain an annuity, providing the borrower with a lifetime income. This income may be used to repay monthly reimbursements of debt.

A lifetime mortgage may be beneficial to the borrower, as the borrower does not lose ownership of their own property. This enables the borrower to leave equity within the estate, allowing the inheritors of the borrower to benefit from the arrangement. Nevertheless, variable interest rates have the ability to reduce the equity left in the estate, subsequent to the end of arrangement. Furthermore, younger borrowers may be experience another drawback as their increased life expectancy is an indicator for years of rolled up interest amplifying the debt. Our advisers will provide each client with precise information on each proposal and assess which equity release scheme is most fitting for the client’s financial and personal requests.

Another equity release product is the home reversion plan. The borrower does not need to issue any monthly fees to the provider and the borrower is also guaranteed lifetime occupancy in their property for the remainder of their life. The plan holder receives a lump sum of money, which can be used as they intend. As an exchange, the provider is permitted to gain a share in the borrower property, enabling the provider to sell the property after the borrowers death. A full home reversion entitles the provider to 100% of the property’s share, whilst a part home reversion plan allows the borrower to retain a certain proportion of the property’s share.

Deciding which equity release is the most suitable is a daunting process for your long term finances can be a complex and difficult process. Our specialist team of advisers will suggest which equity release loan is the most suitable for each client’s financial needs, by evaluating the risks and benefits associated with each scheme.

If you need help on deciding which equity release is appropriate for your plans, contact our team today.

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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.