Equity Release Schemes

Equity Release Schemes


Why do I need advice on equity release schemes?


There is a bewildering variety of equity release schemes available in the UK today. This market place is complicated. We know this market intimately and can help you find the most appropriate equity release scheme for your individual circumstances


How many equity release schemes are there?


There are many different equity release schemes on the market. We cannot cover them all on this web page. However, we can try to simplify them for you.


All equity release schemes exist to enable people usually over the age of 55 to raise money from their homes to use for a variety of purposes such as paying off a mortgage or home improvements.


There are two main types of equity release schemes.

1 Mortgage based equity release schemes

This type of scheme allows you to release money (equity) from the value of your house by taking a mortgage on it. There several types of mortgage based equity release schemes.

A  Interest only equity release schemes.

This type of scheme allows clients to raise money from their property. In return monthly interest only payments are made to the lender. This type of equity release scheme keeps the amount borrowed under control,although the original capital will always remain outstanding. The amount owing does not increase, which means that more of the property value can be left to your family after you pass on. However, if the overall value of the property drops on by the time to hous is sold, then potentially there could be an amount of capital that has not been repaid.

 B.   Interest roll up equity release schemes.

This type of scheme is similar to the interest only method in that clients can gain access to some of the value (equity) in their property. However, with this equity release scheme no monthly payments are required. The money released can be used for any legal purpose. This type equity release scheme can be very useful for clients that cannot afford the monthly payments. The interest payments are added to the loan, however, and the size of the original capital and interest will increase over time.


C.   Drawdown equity release schemes.


This type of arrangement has only been available for the last few years. In that time however it has proven to be a very popular method of equity release. This scheme also requires no monthly payments. The significant difference this scheme offers is that clients can release a smaller amount of equity to start with.


A total amount of borrowing is agreed initially. If you do not release the full amount of the equity at the start you can return for further drawdowns later. Some equity release schemes allow you to borrow as little as £10 000 initially and then take further drawdown’s of £2000 when needed. As clients do no release all of the equity from day one the speed with which the mortgage amount rolls up can be reduced.


D. impaired Life Equity Release Schemes


This is another relatively new type of equity release scheme. As with all equity release schemes it allow clients to release some of the value of their property.  However, clients that have suffered health conditions such as a heart attack or cancer may find that they can apply for larger advances.


2 Home Reversion Equity Release Schemes


This type of equity release scheme differs significantly as it does not have any mortgage involvement. Clients opting for this type of scheme to release equity,  sell their property to a home reversion company. They can use the money released for any legal purpose and the company allows them to live in the hose for the rest of their lives. The home reversion company will, however, buy the property at a discount to the current value as there may be some years before they can sell the property.


A - Part reversion Equity Release Schemes.


This is a very similar method of equity release to that above. In this arrangement a part of the value is released. The home reversion company buys a share of the house say 25% or 50%. The client retains the rest and can therefore be certain of passing an amount on to their family. This equity release scheme is likely to be attractive to clients with high value properties

B  - Impaired Life Equity Release Schemes


With this type of equity release schemes, clients with health conditions such as cancer or a heart attack may be able to sell their property to a home reversion company at a higher price than would  otherwise be possible. This type scheme allows clients to release more money from their property.

Equity Release Schemes - A Summary

As you can see from the above, there are many equity release schemes to choose from. We know and understand this market intimately. We can explain all of the above equity release schemes and can help guide you through this complicated matter.
Once you have completed an equity release scheme they can be difficult, expensive and often impossible to change.  It is vital you choose the equity release scheme that suits you and your family best.


Contact us for impartial advice on which equity release scheme is best suited for you and your family. 

Equity release advice – the next step


We offer a national service and can help you where ever you live. We provide equity release advice by phone, internet and post.   We have invested in cutting edge technology to help us do this. This gives us greater efficiencies. We are able to pass this on to you in the form of competitive fees. As we work in this way, we are happy for you to compare our fees with any firm providing specialist equity release advice


Please call us on 01244 566526

Your enquiry will be treated in the strictest confidence. We deal with you in a friendly and sympathetic way.

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A lifetime mortgage is a loan secured against your property. Your home may be repossessed if you do not keep up the repayments on your mortgage or any other debt secured on it.

 

Typically, our equity release fees may be £375. £75 is paid on application and the balance on completion.