With house prices having risen considerably over the past few decades, UK's over-55 homeowners are finding themselves sitting on a large amount of equity. Traditionally, the only way to make use of this equity was to sell your home and downsize.
But what if you want to stay in your current home, and still make use of your property wealth? If this is the case, releasing equity could be the thing for you.
Simply put, the equity that you have in your home is the value of your home minus any loans secured against it. For most homeowners this will be any outstanding mortgage amount.
As an example, if your home was worth £200,000 with a £50,000 mortgage secured against it, you would hold £150,000 equity.
There are several ways that you could access the equity tied up in your home. As mentioned, you could sell and downsize to a different property. Increasingly though, homeowners over the age of 55 would prefer to stay in their home, rather than to move to a new property.
For those homeowners, they could release equity with a Lifetime Mortgage or home reversion plan. At Responsible Equity Release we will only advise on Lifetime Mortgages, as only with this product do you retain complete ownership of your home.
When you decide to release equity, there are many ways that you might decide to use your tax-free cash lump sum. If you are looking for a little inspiration however, we have detailed some of the most common reasons for releasing equity here.
Contrary to popular belief, having an existing mortgage does not stop you from releasing equity. It is possible, provided that the mortgage is cleared upon completion of the equity release process. Many people decide to use their tax-free sum to achieve this.
For some of our customers, nothing beats the ability to advance an inheritance to their loved ones. Gifting an early inheritance now not only allows you to see the joy it brings within your lifetime.
Not all of our customers wish to release equity for grand plans. You might simply wish to make life a little more comfortable by releasing a portion of your equity over time, allowing you to boost your disposable income.
By taking equity out of your home today, there will be less available to your estate in the future. If you're in receipt of any means-tested benefits, then a tax-free sum could affect your entitlement to them. It is also essential that you do not commit to any spending relating to a Lifetime Mortgage before the money is in your account.
As a member of the Equity Release Council, the trade body for our industry, Responsible will only offer advice on products with the following customer-focused safeguards:
To learn more about equity release and whether it could be right for you, call our friendly UK-based Information Team today. They can help you to discover if you are eligible, as well as arrange an appointment with one of our advisers should you be ready.
You can contact them today on 0800 048 5384.