Equity Release Plans

Find out more about the types of products available to release the equity in your property.

Lifetime Mortgages

A Lifetime mortgage is a mortgage that does not require monthly repayments, although with some plans, rather than roll up the interest, you can opt to make monthly repayments if you wish. You retain ownership of your home and interest on the loan is rolled up (compounded). The loan and the rolled up interest is repaid by your estate when you either die or move into long term care. If you are part of a couple, the repayment is not made until the last remaining person living in the home either dies or moves into care, meaning that both you and your partner are free to live in your home for the rest of your lives.

If you take out a Lifetime Mortgage, you can choose to receive your funds in a lump sum or in smaller, regular amounts. There is also an option available to increase the amount you have borrowed as and when you want to, up to the maximum limit agreed with the plan provider. With some plans you can elect to protect some of the value of your property as an inheritance for your family, meaning that you can benefit from releasing equity while still retaining something to pass on to your chosen beneficiaries. Some people may be able to release larger lump sums due to impaired health.

Home Revision Plan

A Home Reversion Plan also allows you to access all or part of the value of your property while retaining the right to remain in your property, rent free, for the rest of your life. With a Home Reversion product the provider will purchase all or part of your house taking into account your age and your health and will provide you with a tax free cash lump sum (or regular payments) and a lifetime lease, guaranteeing you the right to stay in your property rent-free for the rest of your life.

There is no day-to-day interference and no restrictions on treating the house exactly as before; as a private home to live in freely. The percentage you retain in your property will always remain the same regardless of the change in property values, unless you decide to take further cash releases. At the end of the plan your property is sold and the sale proceeds are shared according to the remaining proportions of ownership.

With both a Lifetime Mortgage and a Home Reversion Plan it is possible to give a homeowner some certainty in their future finances. With a Home Reversion Plan the client knows precisely what he/she has parted with and, equally, what has been ring-fenced for later use, possibly to leave in a Will.

Considerations

Within these two definitions there are many different options available and it is important that your current and future needs are assessed so that you can be advised as to which is the right type of equity release plan for you.

As advisers Acclaimed Mortgage Consultancy can also help you to establish how taking out a Lifetime Mortgage or a Home Reversion Plan might affect your tax position, your eligibility for means-tested benefits or your ability to move or sell your property. You should talk to your Acclaimed Mortgage Consultancy adviser about these risks if you are at all unsure.

There are advantages and disadvantages in both types of plans and our advisers will explain these to you. If you would like your family to be involved we can also with your permission, answer any questions that they may have. Our objective is to ensure we choose the best plan to fit your needs.

To understand the features and risks of an equity release plan ask for a personalised illustration from your Acclaimed Mortgage Consultancy advisor.
One of the most important things to look out for when considering equity release advice is the Equity Release Council logo. Approved members of the Equity Release Council, such as Acclaimed Mortgage Consultancy, are able to display this logo and shows that they are committed to the Councils Code of Conduct, full details of which can be found at www.equityreleasecouncil.com

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