Equity release plans are increasingly popular and can help homeowners achieve financial freedom in retirement by releasing some or all of the equity built up in their homes.
As the demand for these plans increases, it becomes more important for homeowners to know what they are getting into and appreciate the full importance of this type of lifetime commitment.
The right plan, recommended by a reputable organisation, can be of considerable benefit but independent, specialist legal advice is essential.
There are two main types of equity release plan - liftetime mortgages and reversion schemes – and they are provided by a wide range of financial institutions to house owners over the age of 55.
The sale of these plans is regulated by the Financial Services Authority.
Our EQ Legal equity release legal service does not cover unregulated “sale and rent back” schemes which should be approached with the utmost caution.
With a standard lifetime mortgage, a lender will provide a loan based on the value of your property but will not require any capital or interest payments during your lifetime: interest is rolled up and added to the amount of the loan which is then repaid from the proceeds of sale after your death. Some lifetime mortgages let you choose to pay the interest monthly.
Reversion schemes involve you selling your home (or a proportion of it) to the plan provider but continuing to live in it for as long as you need to.
Remember that we do not sell equity release products so we are free to provide you with independent, impartial legal advice about the implications of entering into a plan you have chosen yourself or that has been recommended to you.
We will also make sure you give proper consideration to a number of alternatives to traditional equity release schemes.
If you are in the early stages of considering an equity release we will happily introduce you to an Independent Financial Adviser who can make sure you get the financial advice you need.