Equity Release

If you’re thinking about equity release but don’t know where to turn for advice, read our step-by-step guide.

If you’re thinking about equity release but don’t know where to turn for advice, read our step-by-step guide

Equity release looks like a retirement finance solution that’s here to stay, with the Equity Release Council reporting that in the first three months of 2019 alone, more than £930m of housing wealth was unlocked by UK homeowners aged 55 and over.

For some, equity release, which enables you to unlock a proportion of the equity from your home as tax-free cash, can still sound a little daunting. And, as it’s a financial solution that is only available through specialist brokers, it’s understandable that you may not know where to turn for advice.

Step 1

Have an understanding of what you would like the money for. With equity release the lowest amount that you can release is £10,000 and the maximum amount depends on the age of the youngest homeowner and the value of your property. equity release to go on a dream holiday, carry out home improvements and give a gift to friends or family, amongst lots of other things. Once you’ve paid off any outstanding mortgage that you may have, the money that you release is yours to spend just as you wish.

Step 2

Contact a specialist broker who is qualified to offer equity release advice. The Equity Release Council holds a list of all of the members who are qualified in this specialist financial solution, which is only available to homeowners aged 55-plus. Some advisers are tied to particular products, but a whole-of-market broker, such as Age Partnership will be able to offer advice from across the market. They can use this whole-of-market information to advise a suitable plan based on the requirements you’ve discussed.

Step 3 Organise a quotation to discuss your borrowing needs. Some brokers, such as Age Partnership will provide a quote free of charge and without any obligation for you to

proceed. With Age Partnership, only if you then choose to proceed and your case completes would a fee of 1.95% of the amount released be payable (minimum £1,495).

Step 4

Your adviser will help you understand all of your options. They will also ask you to consider alternative methods for accessing the funds that you’re looking for, such as downsizing to a smaller property. As part of the free equity release quotation the adviser will provide you with a personalised illustration which outlines the features and risks involved. It’s the adviser’s job to ensure that you’re fully informed about all aspects of equity release including the effect it will have on the amount of inheritance you can leave and if your entitlement to means-tested benefits could be affected both now and in the future. The adviser will also explain that the money you release, plus accrued interest will be repaid upon death, or moving into long-term care, and equity release may involve a home reversion plan or lifetime mortgage which is secured against your property.