Your home is likely to be your biggest asset. And as you get older you may start to think about whether you could release some of the value tied up in your property to fund home improvements, take holidays, fund care costs or simply to supplement your income.
Equity release is a way of freeing up money from your house without having to sell it or move home. And it is growing in popularity.
In 2016 this form of lending reached a record £2.15 billion, according to the Equity Release Council.
Most people who take out equity release use a product called Lifetime Mortgages. This is where you take out a mortgage secured on your property provided it is your main residence and you retain ownership.
This is an interest only loan and you can choose to make repayments or let the interest roll-up. The loan amount and any accrued interest is paid back when you die or when you move into long-term care.
Another form of equity release is called Home Reversion.
With this you sell part or all of your home in return for a lump sum or regular payments.
You continue to live in the property rent free until you die, but you have to agree to maintain and insure it.
At the end of the plan your property is sold and the sale proceeds are shared according to the remaining proportions of ownership.
Equity release customers must be at least 55 years old, but most are much older. You will have to live with any decisions you make to free up the cash locked in your property for the rest of your life.
It is therefore essential that you understand exactly what you are committing to and the impact that might have on the inheritance you will leave your loved ones.
This is where it pays to get independent and expert advice.
To speak to one of Chadney Bulgin’s specialist advisers and get all the facts you need to make a proper considered decision, call us on 01243 532161 or email firstname.lastname@example.org.