Understanding your personal circumstances is vital in finding the right equity release plan for you.
Retirement mortgage quotation
What is Equity Release?
Equity release is a mortgage option to release the cash that is tied up in your property whilst you live there. You can take the money you release as a lump sum of cash or in smaller amounts.
Your equity is the percentage of your home that you own outright. It’s the difference between the amount left to pay on your mortgage and the property’s market value.
The most common type of equity release plan is called a lifetime mortgage or retirement mortgage, which is available to homeowners who are in later life aged 55 or over and is a secured mortgage taken out against your home which allows you to unlock tax free equity. A lifetime mortgage is an interest only lifetime mortgage, no repayments are paid until you die or need to move into long-term care.
Retirement mortgage - How will I receive the money?
When releasing equity in your home through a lifetime mortgage you can take the cash that has been released in two ways. A one-off lump sum payment or smaller amounts, with a cash reserve you can draw from when needed. Lifetime mortgages are a popular mortgage option for freeing up cash in later life as most people’s biggest asset is their home. So, whether you want to release equity to help a loved one purchase their first home or even some disposable money for that dream holiday in retirement, equity release is a practical way of accessing tax free cash.
What can equity release be used for?
With a sudden cash injection can give your budget the room to breathe and enjoy your retirement in a number of ways
Pay off an existing mortgage
No longer pay monthly instalments for your mortgage, by changing an existing mortgage with a lifetime mortgage.
Release cash for home improvements
Fund the home improvements you have always wanted, which could also add further value to your home.
Helping your family financially
By gifting equity now rather than in form of an inheritance can help your family immediately, the cash could be used to help a family member purchase their first property or just see them change their lives for the better.
Have you been planning that dream holiday for when you retire or just want some extra breathing space financially in later life, then releasing equity in your home could be a possible option?
How to release equity from your home – Retirement mortgage
Here at Amber mortgage solutions we offer the best lifetime mortgage options which is a form of equity release, and is a great way to unlock the value of the home you live in as tax free money, you can use as you wish and is a great way of planning for retirement.
The amount of equity in your home is based on how much your home is worth and how much you owe on your mortgage, so even if your mortgage isn’t fully paid off you can still take advantage of equity release by changing to a lifetime mortgage instead.
How does a retirement mortgage work?
A lifetime mortgage works by borrowing money secured against your home, provided that the property is your main residence. The property the mortgage is secured against remains yours and nothing is repaid until you die or move into long term care.
It is important to remember that equity release will reduce the amount of inheritance you can leave and may also alter your tax position.
If your considering equity release our team of specialists based in Southend on Sea can advise you of the best way to release equity in your home. Call us on 01702 619 221 or visit our office.
Am I eligible for equity release?
Your eligibility for equity release will depend on if you own a property in the UK and its value. You must also be 55 or over (or the youngest if a couple) and if you meet these criteria you could be eligible for equity release.
If equity release is taken out jointly, whether you are married or in a civil partnership, your partner will have the right to live in the property for as long as they want should you pass away or move into long term care.
How to apply for equity release - lifetime mortgage?
To apply for a lifetime mortgage, you'll need to:
- Be aged 55 or older (for joint applications, all applicants must be over 55).
- Own a home within the UK (excluding the Isle of Man and the Channel Islands) worth £75,000 or more.
- Borrowing at least £15,000
- The property you are securing the lifetime mortgage against is your main residence
- You have no mortgage, or if you have a small amount left to pay off then you still may be eligible for equity release and the cash received can be used to pay off the rest of the mortgage debt.
How much equity could I release?
The amount of equity you can release from your home ranges from 20% up to 50% of the property value. However, this depends on your age and the value of your home. Usually the older you are, the more equity you can release.
Releasing equity tied up in your home involves taking out an equity release mortgage. Therefore it’s not a decision to make lightly and should be considered as part of your overall financial planning needs. For example, if you have savings or investments, you may think about using these funds first.