Our Equity Release Team provides specialist legal advice on lifetime mortgages and home reversion plans. We are the only member of the Equity Release Council in Wiltshire, Somerset and Bristol.
The Council represents and sets the standards for the equity release market, and as members, we are committed to acting professionally and with transparency in offering high quality advice to homeowners.
Speak to one of our specialist team on 01225 755656. Alternatively, complete the Contact Form at the foot of this page.
- What is equity release?
- How does equity release work
- Lifetime mortgages
- Home reversion plans
- Lifetime Mortgage vs Home Reversion
- Key considerations
- Other options to equity release
- What are the costs of equity release?
- Equity Release Council
- Age UK
What is equity release?
Rising property prices mean many older people find their home is a valuable asset. If you are 55 or over, equity release allows you to continue living in your home whilst also releasing some of the equity. This money can provide a welcome boost to insufficient pension income or perhaps allow you to repay an existing loan or mortgage or help a family member with a deposit for their first home.
Usually, the lender reclaims the funds on the sale of the house after your death or when you move into long-term care.
It is estimated that the total funds released in the UK this year will exceed £5 billion, reaching £6 billion by 2024.
How does equity release work?
There are several different schemes available, but they essentially fall into one of the following two categories:
- Lifetime mortgages
- Home reversion schemes
With a lifetime mortgage, you take a loan secured on your home. Typically, the scheme ends when you die or move into long-term care and the property is sold. The outstanding mortgage is repaid from the proceeds of sale.
Home Reversion Plans
Home reversion schemes allow you to sell part or all of your home to a home reversion provider in return for regular payments or a lump sum. Although you have the right to continue living in the property, you must agree to maintain and insure it.
Lifetime Mortgage vs Home Reversion
The main differences between the two are:
Equity release is not a step that anyone should take lightly. Everyone’s circumstances – financial, family, health – are different, as are your future plans and aspirations. Before proceeding, you should always take independent legal and financial advice and allow time for calm reflection. If you feel pressured by anybody – walk away. Here are some key considerations:
Other options to equity release
A major consideration is whether you have other options to equity release. It may come down to the question of why you need the money. If you require a one-off lump sum for a specific purpose, depending on your circumstances, a personal loan may be both a more appropriate and cheaper long-term option.
What are the costs of equity release?
Equity release requires input from a number of professionals. Broadly, the fees involved will include:
- solicitor’s costs and disbursements;
- equity release advisor/financial advisor/broker’s fees;
- lender’s application fee;
- valuation fee.
Equity Release Council
The Equity Release Council is supported by the leading providers of equity release schemes. Its purpose is to protect those who take out equity release schemes.
Companies that subscribe to the Equity Release Council guarantee that you or your estate will never owe more than the value of your property. Often referred to as the no-negative-equity guarantee, it means that you can live in your home:
- for the rest of your life; or
- until you have to go into long-term residential care; or
- until you decide to move.
The charity Age UK has a detailed and downloadable factsheet on Equity Release.