What is equity release?
Equity is the difference in value between how much your home is worth and any mortgage or other debts secured against it.
Equity release is a way of turning some of this value in your home into tax-free cash. It can be a great option if you don’t want to downsize or move home, but need some extra money to help make your life easier.
Many people are using the equity in their homes to supplement their retirement income needs.
Types of equity release
There are two main types of equity release product:
• lifetime mortgages, which are loans that are secured against your home; and
• home reversion plans, where you sell all or part of your property to a reversion company in exchange for money.
Both of these let you stay in your home for the rest of your life or until you move into permanent long-term care. And most products give you the option of taking it with you if you choose to move to a new property, as long as the new property meets the provider's lending criteria.
The majority of equity release products sold in the UK today are lifetime mortgages.
What can equity release be used for?
You can use the money you release to pay for almost anything you like. Whether that’s managing everyday costs, helping out family members, paying off an interest-only mortgage, buying a new car or funding a holiday. You should be aware that equity release will reduce the value of your estate, and using equity release to repay other mortgages or debts could cost more in the long-term.
You can find out more about equity release - how it works, eligibility, the risks, frequently asked questions, and more by visiting HUB Financial Solutions’ website. HUB Financial Solutions are a company within our group who provide specialist equity release advice.