Equity Release

Equity Release, also known as a Lifetime Mortgage, allows homeowners over the age of 55 to release cash from the value of their home to use for any purpose.

Some of the most common reasons for taking out an Equity Release mortgage:

• Replacing your current mortgage
• Home and garden improvements
• Gifting to family
• Lifestyle improvement
• Purchasing a new property
• Holiday of a lifetime
• Inheritance Tax planning

How safe is Equity Release?

We are fully qualified financial advisers, authorised and regulated by the Financial Conduct Authority, with a specialist qualification in Equity Release advice. We only advise on lenders who are members of the Equity Release Council which gives you added protection. Unlike with standard mortgages, you are not at risk of losing your home if you do not keep up with repayments. Repayments on an Equity Release mortgage are optional. If you prefer you can allow the interest to roll up.

How is an Equity Release mortgage repaid?

An Equity Release mortgage is designed to be kept until you die or move into long term residential care. If the mortgage is in joint names, this will be when the last borrower dies or moves into long term care. The house will be sold and the mortgage amount outstanding repaid to the lender. Your beneficiaries will inherit the remaining equity.

Will I still own my home?

Yes, you will remain the legal owner of your home throughout the term of the Lifetime Mortgage.

What if I want to move house?

All the products we advise on allow customers to move the mortgage to a new home with them, as long as the new property meets with the lender's criteria. If the new property does not meet with the lender's criteria, the mortgage would need to be repaid. 

Do I need to make monthly repayments?

Unlike a conventional mortgage, repayments are not required on an Equity Release mortgage. The interest can roll up and will be repaid at the end of the mortgage along with the original loan amount. The products we advise on have a 'no-negative equity guarantee'. This means that the amount owed will never be more than the value of your home. Your beneficiaries will not be left with any debt after the sale of your home. If you prefer, you can make optional repayments to prevent or slow down the effects of interest roll-up. By making optional payments, your beneficiaries will inherit more equity in the house.

Will I still be able to leave an inheritance to my family?

Yes, you can opt to protect some of the value of your property. This does mean the maximum loan amount available will be lower, but you will have peace of mind that a set amount will be available to your beneficiaries. By making optional payments on the mortgage, you will also be increasing the amount of equity which can be left to beneficiaries.

We know that taking out an Equity Release mortgage can be a daunting decision to make. That’s why we encourage you to talk to family members and invite them along to any meetings with your adviser. They may have questions that you had not thought of. We will always go through all your options with you, including any available alternatives to Equity Release.

To book an initial free consultation, please call 01993 650882 or email info@clafinancial.co.uk