Equity release refers to a range of products that let you access the equity (cash) tied up in your home if you are over the age of 55. You can take the money you release as a lump sum or, in several smaller amounts or as a combination of both.
Is Equity Release Right for You?
At South Yorkshire Money, we ensure that any decision you make is made by yourself, and best suited to your circumstances at the time of arranging a plan. If you are a homeowner over the age of 55 and perhaps want to clear some debts, maybe do some much-needed home improvements, go on the holiday of a lifetime or even want to help family members with a house deposit, equity release may well just be the right product for you.
We welcome and encourage your loved ones’ involvement throughout the process, so that you can assess if equity release is the right thing for you and your family. We like to handle things face to face so that we can understand your situation and provide the best service possible.
Whilst there a no restrictions on what the funds released can be used for, typically they are used for one or more of the following reasons:
- The holiday of a lifetime
- Helping or treating family
- Paying off outstanding debts
- Home improvements
- Repaying an existing mortgage
- Buying a new car, caravan or holiday home
An equity release plan may sound like the service for you, but we advise that you read some of the advantages and disadvantages below before you make a choice:
| Advantages | Disadvantages |
|---|---|
| You continue to live in your own home, rent free, for the rest of your life or until you move into permanent residential care. | The value of your estate will reduce and the amount you can pass on in inheritance via your estate will therefore also decrease. |
| The ‘no-negative equity guarantee’ means that you will never have to repay more than the value of your home and your estate will never owe more than the property is worth when it is sold. | Your entitlement to certain state benefits may be affected. |
| The tax-free cash that you release can be used for anything you like from home improvements, clearing a mortgage or debt, to the holiday of a lifetime. | If you wish to repay or end the plan early there may be financial penalties in doing so. |
| With some plans, there are no regular payments to make, the option is yours | Some lifetime mortgages are paid back with compounded interest meaning that over the longer term the amount you owe can grow quite quickly. |
| The flexibility of modern equity release plans means that you can release the money as a lump sum, or a lump sum with a drawdown facility. | You should always consider the alternatives. Equity release is just one possible option for acquiring tax-free money from your home; downsizing or taking on a lodger are two other options. |
No fuss, no hassle, just Simple, Smart Advice.
Our advice is tailored to your circumstances, so if you have any questions regarding equity release or simply wish to know more then please don't hesitate to get in touch.