Equity Release: Unlocking the Value of Your Home

At Sparlings, we understand the value of your home and the financial freedom it can bring. Equity release is a popular way for homeowners over 55 to release funds tied up in their property without having to move. Discover everything you need to know about equity release, including the different types available, the benefits and drawbacks and how to go about releasing equity from your home.

What is Equity Release?

Equity release is a way to release the equity (the value of your homes minus any outstanding mortgage) tied up in your property, without having to sell it. There are two main types of equity release schemes: lifetime mortgages and home revision plans.

Lifetime Mortgages

A lifetime mortgage is a loan secured against your property, which is repaid when you die or sell your home. Interest is charged on the loan, but you can choose to make monthly interest payments or let the interest roll up, which means the interest is added to the loan each month. With a lifetime mortgage, you can release a lump sum or drawdown regular payments to supplement your retirement income.

Home Reversion Plans

With a home reversion plan, you sell all or part of your home to a home reversion provider in exchange for a lump sum or regular payments. You can continue to live in your home rent-free for the rest of your life, but you will no longer own all or part of your property.

The Benefits and Drawbacks of Equity Release

Equity release can be a useful way to supplement your retirement income or to pay for care in later life. It can also help you to make home improvements or pay off debts. However, it’s important to consider the drawbacks before deciding whether equity release is right for you.

One of the main drawbacks of equity release is that it can reduce the value of your estate, which means you may have less to leave to your loved ones. It can also affect your entitlement to means-tested benefits, such as pension credit or council tax support. Additionally, equity release schemes can be expensive, with fees and interest rates that are typically higher than standard mortgages.

Is Equity Release Right for You?

Equity release is not suitable for everyone, and it’s important to get professional advice before making any decisions. At Sparlings, our qualified and experienced advisers can help you to understand your options and decide whether equity release is right for you.

How to Release Equity from your Home

Releasing equity from your home involves a number of steps, including:

• Get professional advice – it’s important to speak to a qualified and experienced adviser to understand your options and the costs involved.
  
  
• Choose a provider there are many equity release providers to choose from, so it’s important to shop around to find the best deal.
  
  
• Apply for equity release – once you’ve chosen a provider, you’ll need to apply for equity release. This involves a valuation of your property and a legal process to ensure you fully understand the terms and conditions of the equity release scheme.
  
  
• Receive your funds – once your application is approved, you’ll receive your funds either as a lump sum or in regular payments.
  
  

Equity release can be a useful way to supplement your retirement income or pay for care in later life, but it’s important to understand the benefits and drawbacks before making any decisions. At Sparlings, our professional, friendly and helpful team of advisors can help you to understand your options and decide whether equity release is right for you.

If you have any other questions or would like to make an equity release, contact our team today at 01206 733733 and enquiries@sparlings.co.uk or complete our Free Enquiry Form to arrange an initial consultation and let one of our experienced equity release solicitors explain your legal rights and options.