EQUITY RELEASE FAQs

Sarah Jagger

Contributing Money Editor, Monday, 7 November 2016

Your questions answered

Do I qualify for equity release?

If you are aged between 55 and 95 and own your own home worth £60,000 or more, you could release tax-free cash from the value of your home.

Will I have to make any monthly payments?

Not if you don’t want to. With a lifetime mortgage there are typically no monthly repayments to make as the loan, plus roll up interest, is repaid when the plan comes to an end. 

Can I still leave an inheritance?

Yes, there are plans available which allow you to protect a percentage of your home’s value, to be able to guarantee an inheritance.

Will I still own my home?

With a lifetime mortgage you will remain the owner of your home. A lifetime mortgage is secured against your home, like a traditional mortgage.

Will I be able to stay in my home?

Yes. All Equity Release Council approved plans guarantee you can stay in your home for as long as you choose to.

Can I apply if I still have an outstanding mortgage?

Yes you can, although you will be expected to use the funds released to clear your outstanding mortgage first.

What happens if I want to move in the future?

All Equity Release Council approved plans allow you to move home and take your plan with you (subject to certain provider criteria).

Is it possible to pay off some of the interest?

With some plans, yes it is. Interest payment lifetime mortgages allow you to pay some or all of the interest, on a monthly basis. These plans allow you to choose how much interest you want to pay (subject to a minimum interest payment).

Can I only release money once?

After taking an initial amount, a drawdown lifetime mortgage option allows you to release portions of the total funds available as and when you need them. The added bonus with this is that the interest is only charged on the actual amounts released. 

If you have an existing lifetime mortgage, you may be able to make an application for further funds, however this will be subject to provider criteria and whether there is still enough equity remaining in your home.

Is equity release safe?

Very much so. Equity release is regulated by the Financial Conduct Authority (FCA), to ensure that the equity release advice offered to the public is transparent, fair and that it meets required standards. For extra security, plans approved by the Equity Release Council come with a number of guarantees which include allowing you to remain in your home for as long as you choose to and that you will never owe more than the value of your home.

How will equity release affect the value of my home and any benefits I receive?

Equity release will reduce the value of your estate and may affect your entitlement to means-tested benefits. All of Key’s advisers have access to software that calculates current benefit entitlement and any effect that releasing equity may have. They will also look for ways to minimise the impact or remove the impact equity release may have on those benefits.

Why do I need to seek expert advice if considering equity release?

Releasing cash from your home is a huge financial decision and one which can only be taken with professional advice, as there are a wide variety of products and offers available at any one time. Plus, there are new plans coming to market on a regular basis too. By seeking advice from an independent equity release expert, you can ensure that you’re getting the very best advice possible, as you will be dealing with someone with a wealth of knowledge about the market.

 

  • To find out more about unlocking cash from your home, speak to one of our experts today by calling FREE on 0808 156 9010, or download your copy of our FREE Guide.
  • Unless you decide to go ahead, Key’s service is completely free of charge, as its typical advice fee of 1.65% of the amount released would only be payable on completion of a plan.

 

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