Releasing Equity from your home

Equity Release is growing in popularity across the United Kingdom.  It can give you a tax free lump sum of money, or a steady regular income in your retirement.  But it is not something to be entered into without careful consideration.

The main benefits to equity release include:

  • A tax free lump sum or steady regular income
  • A reduction in inheritance tax payable from your estate
  • You can live in the property until you die

The main downsides of equity release include:

  • Your family will receive less from your estate
  • It can be costly than selling your property – a lifetime mortgage can cost 4 times what you borrow over a twenty year period, and some home reversion schemes give you a fraction of the home’s value.

There are two types of equity release scheme:

Lifetime mortgages are similar to normal mortgages, but rather than making monthly repayments, the cost or repaying the released equity is met from your estate when you die.  If there is anything left in the estate after the lifetime mortgage has been repaid, this will be distributed according to your wishes in your will (if you have one – if not, we can help with that too!)

Home reversion plans transfers ownership of the home to the lender, but the borrower retains the right to live there until death.  In most cases, this means there is nothing left (in the property’s value) to your estate when you die.

Equity Release may be the financial solution you need.  Or it may not.  If you’d like to find out more, contact Wallace Quinn for an informal chat.