Equity Release Mortgages 

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With property prices now reaching record levels people homes are, perhaps, the highest valued asset that they have. At the same time interest rates and returns from Banks, Building Societies and investments have fallen. This could mean that retired people are finding that they are sitting on a rising asset but experiencing a fall in income. 

A possible solution could be to release some of the equity in the home to produce either an income or a lump sum or both. 

What are Home Equity Release Mortgages?

Home Equity Release Mortgages are simply a mortgage taken out on property to provide a lump sum or an income or a mixture of both. Normally no repayments are required until the house is sold. However, this will depend on the type of plan used. The amount will depend on the value of the property and the age of the owners. Most companies will consider applicants with a minimum age of 60 for the youngest partner. However, one company will consider age 55.  

There are plans with no monthly repayments. Interest on the mortgage accumulates and is only repaid on the death of the last partner or when the last partner needs to leave the property to go into a retirement home. The property is then sold and the mortgage is re paid along with the accumulated interest. The balance can be used to provide nursing home fees or given to the beneficiaries.  Other plans consist of selling all or part of the equity in the property and have a guaranteed income for life or a lump sum or a mixture of both. These plans are known as Home Reversion Plans. 

The interest that accumulates can be either fixed or as a percentage above Bank Base Rate with an interest rated that is capped.

How Burgess & Lee Can Help

There are currently 19 providers in the market place so care must be taken to select the right one for you. Independent financial advice from a qualified advisor is essential along with independent legal advice. We also involve the family and beneficiaries.

Safe Homes Investment Plans (SHIP) gives the homeowner guarantees the main one being that the homeowner does not loose their home if property values fall. 

Note: All mortgages are available subject to status. Terms and conditions apply.Your home is at risk if you do not maintain payments on mortgages or loans secured on it.