Saved for the future without realising it?
YOU’VE probably seen the value of your home increase over time, and you may be able to use some of this equity to release a cash sum. You may not look on your home as part of your financial planning but if its value has gone up, you may have been saving for your future without realising it. If you’re over 55 and you own a home worth at least £75,000, you may be able to unlock some of your equity and turn it into tax-free cash with a lifetime mortgage. It’s not suitable for everybody as it depends on your personal circumstances. Releasing equity may affect your tax position and any entitlement to welfare benefits. Also, you may have savings, and it could make sense to use these first. But if you’re eligible, it’s a way to access money tied up in your home, without having to move. There are no monthly repayments. The loan and interest are repaid usually from the sale of the house when you die or go into long-term care, subject to terms and conditions. Interest will be added each year. This increases the amount you owe, although you have the option to make limited repayments after you’ve had the loan for a year. A lifetime mortgage will reduce the amount of inheritance you can leave, but an inheritance protection guarantee lets you safeguard a percentage of the value of your home to leave to your loved ones, although this will reduce the amount that you are able to borrow. So, how could you use the money? Well, perhaps you need to make home improvements or adaptations to your home as you get older, meaning you can stay put even if health and mobility become more of an issue. Maybe you could help your children towards getting on the property ladder, help fund your grandchildren’s education, or use it for special treats, such as a nice holiday or a new car. So you might find you can hang on to all those good memories tied up in your home and make some more for the future.