Equity Release
Oliver & Co specialise in giving assistance to older home owners looking to release equity from their homes.
Oliver & Co are here to make sure that your equity release goes as smoothly and swiftly as possible.
Oliver & Co are specialist solicitors in this field and will guide you through your equity release making sure you know exactly what is happening at every step enabling cash to be sent to you as soon as possible after the equity release documentation has been issued.
An Explanation of Equity Release
Equity release is a way of turning some of the value of your home into cash
- It is available to people of pensionable age.
- Once the money is released you can use it as you choose.
- You keep the right to live in your home for the rest of your life.
There are basically 3 types of equity release schemes:
1. Lifetime Mortgage Scheme
With these schemes you take out a loan based on the value of your home. The loan is secured against your home but you do not have to make any monthly repayments. Instead the interest is added to the loan every year. The mortgage is repaid once your home is sold either when you die or move into long term residential care.
2. Home Reversion Schemes
Under this scheme you sell either all of your property or a percentage of it to the equity release company. Again you are guaranteed the right to live there for the rest of your life. The property is sold when you die or move into long term residential care. At that time the equity release company receives a share of the proceeds in proportion to the amount of the property you sold to them.
3. Home Income Plans
This type of scheme is akin to the lifetime mortgage scheme but the money from the loan purchases you an annuity which gives you a regular guaranteed income.
Oliver & Co can refer you to a specialist financial adviser who can help you decide if equity release if right for you.
Oliver & Co will explain the equity release paperwork to you, send the necessary paperwork from your deeds to the equity release provider and order the equity release money from the provider.
Are Equity Release Schemes regulated?
The Financial Services Authority now regulates all mortgage based equity release schemes (Lifetime Mortgages and Home Income Plans). At the moment Home Reversion Schemes are not regulated. However, in addition to FSA regulation, the most respected equity release providers sign up to the SHIP (Safe Home Income Plan) code of practice.
Alternatives to Equity Release
Oliver & Co recommends you discuss equity release with our specialist financial adviser as other options should be considered before equity release. For example, down-sizing to a smaller home, checking to see if local authority grants are available for home improvements or using savings. It is recommended that you should tell the people who are likely to inherit your estate. You will need to consider whether equity release will affect your benefits, ie Council Tax, benefits, Pension Credits.
There are some equity release schemes where further advances can be obtained.
It is important that you discuss what happens to the equity release scheme if you have to move into residential care.
How much money you can obtain from equity release schemes depends upon the type of scheme you choose. As a result of thumb, the older you are, the more you can receive and men, by reason of the life expectation table, get more than women.
For further information or help with Equity Release please contact Sally Tipping on 01244 312306.
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