rates being so low presently, and lower dividends consequently being given on shares, many people are finding it hard to maintain the quality of life which they seek for themselves. Some people are even finding it hard to continue to live in their house but don’t want to move.
Equity Release schemes can be an answer for such people. Usually, the scheme is either a “home reversion” scheme or a “Lifetime Mortgage”.
A Home Reversion scheme means that you actually sell some or all of your home to a scheme provider in return for a capital sum which you can use to pay debts (yours or your family’s), treat yourself, give to your family or use to pay future outgoings. In return for transferring ownership, you retain the right to live in the property for life. On your death, or upon you residing in a care home, the property would be sold, the scheme provider would receive their investment, a percentage share, or whatever else the scheme provided for, and the balance would be paid to you or your estate. One should never enter into an Equity Release scheme without obtaining independent professional advice, and there is a whole raft of health warnings we give to clients before advising them to proceed. For example, don’t expect the provider to pay full price for your house, and have your family been consulted, particularly those who stand to inherit from your estate?
The second type of scheme is a Lifetime Mortgage. These tend to be more popular. You retain ownership and repay the loan with interest upon sale or your death. Most Lifetime Mortgages do not require the borrower to make monthly payments. Instead, the “tab” increases year on year, and the scheme provider will give you an illustration as to how much you would have to pay back if the loan was repaid in five, ten or fifteen years.
Press Releases
Releasing Equity in your Home
For example, a lady wanted to help her son in his business which was struggling in the economic down-turn; another wanted to create a charge and give away the monies released so as to minimise the impact of care fees; a couple decided that £20,000 would buy them a very nice cruise and a new car. With interest
Partner, Wills & Inheritance