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Releasing equity in a UK property |
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How
long have you owned your current property? 10
years? 20
years? 30
years or more? Even if you’ve
only lived there for five
years, it’s probably worth a lot more now
than when you bought it.
Do you ever look in Estate Agents’ windows
and congratulate yourself when you see how much
other houses nearby are selling for, knowing yours
must be worth about the same? The trouble is,
that value is only on paper.
It’s locked up in your property. You can’t
invest it for income, make your retirement dreams
come true or reduce your potential Inheritance
Tax liability.
Enrich
your retirement by releasing capital locked in
your property.
An
Equity Release plan is a way of using some of
the capital tied up in your property to give you
a more comfortable and enjoyable retirement. If
you (and your partner) are aged 55 or over and
are homeowners, you could be eligible for an Equity
Release plan and make much more of your retirement.
The amount you can borrow will depend upon your
age and the value of your property.
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Make
your retirement dreams come true with Equity Release!
There
are various Equity Release plans on the market. Whichever
one you choose, you can carry on owning and living in
your own home and have the financial freedom you need
to make the most of your retirement. What’s more
the Equity Release plans we deal with have a no negative
equity guarantee meaning you or your estate will never
be asked to repay more than the open market value of
your property, so you may still be able to leave your
family or friends an inheritance. Better still, you
don’t have to make monthly repayments and you
can even move home if you wish.
When looking at using your home as a source of capital
there are, broadly speaking, two types of scheme available:
Reversionary Annuity Plans
These plans work by the provider purchasing your property
but leaving you with a guaranteed legal entitlement
to live in your home at a nominal rent (usually of £10
per annum) for the rest of your life. The insurer will
pay you the lump sum or income from an annuity until
your death whereupon your home will be sold. The proceeds
at that time will be paid to the life assurance company
as the deferred single premium for the annuity enjoyed
by you until your death.
Should you prefer not to dispose of the entire interest
in your property then a partial interest may be disposed
of, the remaining interest being passed on by you in
your will.
Alternatively you may dispose of the remaining interest
at a later date to boost your income still further.
The amount of money released to you will not directly
relate to the portion of the property sold as other
factors such as life expectancy are taken into account.
It is important to remember that you will remain responsible
for the insurance, maintenance, running costs, rates
and service charges relating to your property. The company
will expect it to be kept in a good state of repair
so as to preserve the value of the asset it acquires
from you.
Mortgage Type Plans
These plans work in a similar way to a normal mortgage
by allowing you to use your house as security for a
payment free loan. Again, this type of scheme can provide
either an income or lump sum (or a combination of the
two).
The loan and interest only become payable when you die
or leave your home because you need long term care.
You will have no repayments to make until the property
is sold on your death or at a time when you need to
enter long term nursing care. Should you choose to move
to a lower value property for any reason then you may
be required to repay a proportion of the loan plus interest.
In addition, if your circumstances change and you are
able to repay the loan early, for any reason other than
entering a care home or death, early repayment charges
will apply.
With this type of scheme the amount of money released
to you will directly relate to the value of the property.
As there are many different equity release providers
to choose from and many different types of scheme available
it is imperative that you seek advice before proceeding.
We offer this service. We will review your current requirements
and search the whole market to find you the most cost
effective and appropriate provider. Please click on
the tabs at the top of the page and we will contact
you with a view to help you put the correct plan in
place.
Dedicated loans website
Alternatively, if you feel that equity release is not the right option for you, visit our new dedicated loans website Homeowner Loans by clicking here
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Questions? support@finanz.co.uk
Phone: (+0044) 0845 130 0009 Fax: (+0044) 0845 370 0021
©2003-2006 Godbold and Great British Finance Limited, E&OE. All Rights Reserved.
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