Safer ways to un­lock your home’s value

Midweek Visiter - - News -

IF you own your home, then one way to re­alise some of its value is through eq­uity re­lease. Some peo­ple ad­mit to be­ing put off by eq­uity re­lease be­cause they think that a plan will pre­vent them from be­ing able to leave an in­her­i­tance. This does not have to be the case. Of course, not every­body wants to, or is able to, leave their en­tire home’s value to their younger gen­er­a­tions.

For some, the eq­uity in our prop­erty is a life­line to keep­ing afloat in re­tire­ment. For oth­ers, the money tied up in our bricks and mor­tar is ours to en­joy af­ter years of work­ing to pay off the mort­gage.

By its very na­ture, hav­ing an eq­uity re­lease plan will re­duce the amount of in­her­i­tance you leave, as you are un­lock­ing and spend­ing some of the cap­i­tal from your home’s value.

But to­day’s wide range of plans of­fer sev­eral ways for you to pro­tect some of the re­main­ing eq­uity as an in­her­i­tance for your loved ones.

Your in­her­i­tance pro­tec­tion op­tions in­clude pro­tected eq­uity guar­an­tee and plans. in­ter­est pay­ment

Mod­ern life­time mort­gages have a se­cu­rity op­tion built into them which is called the “in­her­i­tance pro­tec­tion guar­an­tee”.

Many lead­ing eq­uity re­lease providers of­fer this safety fea­ture.

It works by en­abling you to select a per­cent­age of the prop­erty value that you want to pro­tect. The higher the per­cent­age, the smaller the max­i­mum loan amount avail­able.

For in­stance, if you wish to pro­tect 30% of your home’s value as an in­her­i­tance for your fam­ily, then the max­i­mum amount your provider will al­low you to un­lock will be re­duced by 30%.

Some eq­uity re­lease plans now of­fer the flex­i­bil­ity of vol­un­tary pay­ments to re­duce or pre­vent in­ter­est from ac­cru­ing on your loan.

These pay­ments can be made as and when you wish, or with some plans, paid reg­u­larly by stand­ing or­der.

The dif­fer­ence be­tween this and a tra­di­tional life­time mort­gage is that, rather than in­ter­est rolling up over the life of the plan (com­pound in­ter­est), pay­ments back to your provider are made to re­duce or pre­vent the in­ter­est from ac­cru­ing.

In some cases, you could even re­pay the loan plus in­ter­est in full.

For many of us it is im­por­tant that we’re able to leave an in­her­i­tance for our loved ones when we’re gone.

Af­ter ded­i­cat­ing our lives to look­ing out for those clos­est to us, the money we leave be­hind is our fi­nal gift to them; but don’t rush into a de­ci­sion.

If you are think­ing about un­lock­ing some of your home’s eq­uity to boost your re­tire­ment fi­nances then it is so im­por­tant to speak to an in­de­pen­dent spe­cial­ist first.

Call Age Con­cern Liver­pool & Sefton on 01704 542993 to ar­range a no obli­ga­tion dis­cus­sion with our ex­pert eq­uity re­lease provider.

They are mem­bers of the Eq­uity Re­lease Coun­cil, so you can rest as­sured that you will never be in a neg­a­tive eq­uity po­si­tion or at risk of los­ing your home.

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